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We hope you've enjoyed the many great sessions, and if you've missed any, we'll be sharing out recordings via email and on the Quorum website. You can access anything you might have missed over the course of the week. I'm really excited to lead this session for all of our PAC people out there today. My name is Claire McDonough and I'm a senior account executive at Quorum with a focus on our PAC product. Last year when Quorum hosted Wonk Week, we didn't have a PAC product, but last December, the CisionPAC team joined Quorum, and we've been working hard to bring you a new PAC solution. So please be on the lookout for a future announcement about the launch of Quorum PAC. Our session today is gonna be a conversation about how to leverage employee resource groups into your PAC engagement strategy with the midterms right around the corner, I'm sure you all are all starting to think about your 2023 and 2024 to-do lists. Claire McDonough (01:01): And if thinking about where your ERGs fit into those plans isn't on your to-do list, it should be after our session today. So throughout the session please feel free to use the chat window to engage with your fellow attendees and to add your questions that Michael will answer towards the end of our conversation. And we'll have a few polls along the way to help drive our conversation as well. So, with that, I am thrilled to be joined by Michael Kennedy, the Senior Vice President of Global Government Relations and Public Policy at VMware. Michael is the Senior Vice President for Global Government Relations and has led VMware's global GR team since 2014. Prior to VMware many of you may have known him as the Chief of staff for Senator Hatch of Utah, and he was previously the Vice President for Federal and State Relations at Utah State University and as a lobbyist at Lee Smith. Thank you so much, Michael, for joining us today. We're delighted you're here and let's just dive right into this top. So to get us started, why don't you tell us a little bit about VMware PAC, and can you give us an overrule overview of your role in managing the PAC and what your PAC team structure is? Michael Kennedy (02:19): Well, first thanks for having me. I'm delighted to be here and grateful to Quorum for the opportunity. Thanks to everybody for tuning in as well, and I hope it'll be a good interactive discussion. So thanks for having me. VMware's PAC is not huge like many who may be on this call. And it's not tiny either. I think I try to just drive it as respectable. We're about 250k a cycle and that allows us to kind of participate and be out there without it being all-consuming. Like many people who were joining us today it's, it's been very difficult to grow the PAC and, and overcome kind of skeptical employees within the company especially given recent political polarization and environments and the like. But I view it as a critical tool for us and a strategic tool, and we try to be a strategic company VMware for those who don't know, you're in great company. We're kind of the biggest tech company no one's ever heard of. We're a software company that provides cloud infrastructure and cybersecurity and other kinds of plumbing for the cloud and the internet. Claire McDonough (03:38): So what has the 2022 election cycle looked like for you, and how has it different from past years? Michael Kennedy (03:45): Yeah, you know, generally our PAC is a, you know, by mandate and by bylaw, we're a bipartisan bicameral PAC. So we've tried to always think about both sides of the aisle, both chambers both sides of the capital, and be strategic that way. I think 2022 has changed in a sense because we, like many people, took a strategic pause after January 6th and some of the aftermath there. And we have, you know, ramp back up, but we're still kind of negotiating the 147 and, and other aspects that are part of that fallout. Claire McDonough (04:32): So focusing and talking a little bit more in-depth about the original pillars of your disbursement strategy and a regular cycle, what does your disbursement strategy look like and how has that had to change or pivot over the events of the last two years? Michael Kennedy (04:49): Yeah, you know, that's a great question. And previous to what I would say really was George Floyd's murder and, and some of the events that came out of that we were typical PAC criteria. It was very business-focused, business outcome-focused, and we had kind of three main pillars. One was we gave to people who represented our office locations and where we had a lot of employees we gave to leadership in, on both sides of the aisle and the Senate and the House. And then we gave to members of committees who were relevant jurisdictions and were relevant to our core business. And, you know, once George Floyd was murdered and people started paying attention a lot more to some of the ESG issues that were surrounded political giving, we, we received some criticism from our ERGs and some concerned employees about giving to members who had an F rating from the NAACP, for example. Michael Kennedy (05:59): And we had to explain, you know, a couple of things, one, that we don't follow scorecards in general because scorecards are generally based around votes, and giving money for votes is, is the textbook definition of a bribe. So we had to kind of explain that. We have to be very careful about how we qualify people to receive PAC donations. The other side that we emphasize is that I believe every Republican had an F rating from the NAACP including, you know, members like Tim Scott and others. And so we kind of the partisan nature of those, of some rankings, we are able to kind of say, listen, we don't follow all these things because they tend to be partisan and we're bipartisan in nature. The other thing that we emphasize is that what we try to do is we try to qualify and, and affirm some of these areas rather than disqualify them in a negative way. Michael Kennedy (07:00): And I think as soon as you start finding reasons to disqualify people it became evident that, you know, I can find 535 reasons pretty quickly to disqualify probably every member of Congress based off of the thousands of votes and positions and tweets and other things they do every year. So after this happened, we did think about this and we said, Okay, we wanna listen to our employee resources group. We call 'em pods at, at VMware, the power of difference groups we call 'em. So if I say pod I mean ERG but and so we said, Okay, how do we include these communities within our organization and how do we, you know, get them involved and, and make this a positive for VMware government relations for VMware PAC and, and kind of get some energy behind that. Michael Kennedy (07:53): So the two things that we did that were kind of transformational for us were, one, we added every pod leader to our PAC board of directors. And we added our vice president of diversity, equity, and inclusion and our chief people officer to the board. And that effectively doubled the board count, and the board was primarily our C-suite and then me and our head of public sector sales. And so it doubled in effect the size of the board and the pod, the ERG members were pretty enthusiastic about, but they were skeptical at first. So I don't wanna learn what this means and things, but the ability to continue to have another platform to be passionate about their issues was positive and the executive exposure was also very positive. The second thing that we did is we added a fourth pillar to that giving criteria. And we said, okay, we can now qualify people solely based on our values and what we call our 2030 goals. And so we were then able to say, okay, this person, this individual may be bad in general on some of our business issues and whether it's taxes or, you know, trade or some of the other traditional business issues. But if they're terrific on LGBTQ issues that can be the sole qualifier for giving them a PAC check. And those two things have been pretty transformational. Claire McDonough (09:32): Interesting. And so, in terms of how their participation now on the PAC board has changed your disbursements and your disbursement strategy, is it been just finding those creative ways to allow you to expand those disbursements to other people that may not be an industry-focused disbursement? Can you talk a little bit more about that and what that conversation look like internally, to the extent that you can share it? Michael Kennedy (10:03): Yeah. Listen, I don't think this is without risk, right? Mm-Hmm. <affirmative> and, and so once you bring more voices in who have political positions and political ideologies and the like, which is kind of everybody, it complicates the strategy behind what a government relations team is to be. So we've had to have a lot of conversations with the board members to say, this is a board not an executive team for the PAC mm-hmm. <Affirmative>. And so we encourage them to give us thoughts and ideas and feedback, but we generally approach them on, hey, we think this member is really good on women's issues. Or we think these five members are really good on women's issues. What do you think? Who do you think would be, you know, the right people, You know, do you wanna look into their issues? Michael Kennedy (10:56): Here are some tweets, here's some, you know, bills they've sponsored, here are some positions they've taken. And then, we get the feedback from them. We don't really allow for a veto per se. And we don't just give a blank check over to say, hey, here's some money that you can disperse for women's issues or LGBTQ issues, or black issues or Latino issues, or whatever it might be. And, and so it's not, they are not the executives, the GR team retains kind of that executive authority and the strategy behind it, but we look for them to be the advisors in that. Claire McDonough (11:34): How often do you meet with the individual pods to talk about, what's going on with the PAC and to do education or to do some fundraising within the pods? And have you seen now that you have developed an engagement strategy with them, has it increased your contributions from those employees at all? Michael Kennedy (11:53): Yeah, and this has been kind of the win-win-win scenario of this, is that it's allowed us to engage with them in many ways. And the PAC becomes kind of the initial conversation, right? They're now part of a board. They have to think through some of these issues. They have to get involved politically and, and think through the strategy as VMware in these areas. Most of the people who are our pod leaders, you know, are engineers or in the sales org or, you know, doing different day jobs, and they don't think about what government relations does every day. So we've been able to do that. The other thing that changed for us is we have started, you know, before I talked about the size of our PAC and how it's respectable, but not big. Michael Kennedy (12:42): So we haven't really hosted to date a lot of PAC events. We would attend a lot and we'd show up and we'd talk about our software and the cool things that we're doing, and how we're changing the world and et cetera, et cetera. But we didn't really host a lot of events. The events we started hosting. And there are people who I've seen, the attendees who've joined us in this, and I'm grateful to them for it, is we've started hosting events that have been built around these issues. So we'll approach a member and say, hey, listen, you are a champion of the AAPI community and we would love to have a fundraiser based around your positions on championing the AAPI community. And we want to talk, we'll come in another time and we'll tell you about the cool things we're doing for, you know, software or medical devices or financial services or, or many of the things that, that other people do here. Michael Kennedy (13:35): But today we wanna talk about what we as corporate America are doing ourselves to support our AAPI community. And we wanna recognize you, the member, for being a champion for that community. And we're all gonna hand you a check saying, you know, please keep fighting like hell. Cause we recognize you. We wanna tell you what we're doing, what we care about. And for, so, for the member, they love it because they're recognized for things that they're not always recognized for and things that are, they're passionate about naturally. And it's not a run-of-the-mill fundraiser where it's, you know, people saying, you know, what's gonna happen with tax extenders? Or, you know, how does the NDAA play out? And it's, it's a different type of fundraiser and conversation. And then for them what we do is we invite all of the companies who attend to invite a plus one. Michael Kennedy (14:25): So we will bring our pod leaders either into Washington for an in-person event or onto Zoom to ask questions. And so these experts who are, have these, you know, wonderful, passionate stories about how they got involved in leading the community at VMware, or the other companies that join us, they had these terrific exchanges. They get to ask a member of Congress, you know, questions directly. Sometimes they get, get the selfie right if they're in town. And so then they go back to the, to their ERG and they say, Hey, listen, I was able to ask Senator so and so, or congresswoman so and so about this, and we had this, you know, terrific exchange and they liked our ideas and, you know, maybe they're gonna come and talk at our other event. And, and, and so they, they get fired up and it gets the ERGs fired up, right? And I think that the third win is that then for us as a company and for our CEOs and other executives, they get to say that, hey, listen, we're literally putting our money where our mouths are on these issues. And, you know, we're not just virtue signaling or talking about things or sending a tweet. We're, we're investing real dollars into some of these issues. And so I think it's been a win-win-win across the board. Claire McDonough (15:39): So in terms of your pod structures, are the people who are serving on your PAC board, are they elected by the other members of the pod to serve in this capacity? And was their participation and contribution to the PAC part of that requirement? Or did you just let that happen organically? Michael Kennedy (15:59): Well, we never require a PAC donation <laugh>. But it's, it's strongly encouraged if they wanna kind of be involved that they are generally global pod leaders mm-hmm. <Affirmative> and we've had to kind of think this through and it's evolved over time, where we now have kind of two classes. We have seven pods and then we add an eighth. So we have a Black pod, a Latino pod Asian pod, disability pod, pride pod, women pod and veterans pod. And then we add sustainability to that and involve our, and our kind of ESG sustainability offices in that. And so we've kind of created two classes. They served for two years, and we kind of stagger the classes so that they're not all coming in at once and relearning. And then we, we actually ask that those that overlap to happen so that then you can, when they're in their pod leadership, they generally are pod leaders for two years when they're elected. Michael Kennedy (16:58): And we ask one of those years to be on the board and then a kind of emeritus year to stay on off the board, but on the pod so that they can train the new leader to come in. So that's taken a little bit of evolution and learning, just when we had huge turnover for a couple of leadership areas and we were kind of starting from scratch, but it's been, again, generally very, very positive. And the engagement in the PAC and then just understanding what government relations do is great. Cuz when they fly out for these fundraisers, we then say, Hey, listen, we're gonna be on the hill doing these meetings anyway. Do you wanna join us? And you can talk about, you know, the other things that VMware does. And, so then they kinda get a, a better appreciation for just government relations as a function as well. Claire McDonough (17:47): So you've done a really good job of you know, bringing them in and providing a good structure and getting them engaged and help and putting some structure there. But how do you manage and navigate when they push back really strongly on a particular candidate? How do you navigate that conversation and what is your viewpoint and how do you get to an end solution decision about moving forward? Michael Kennedy (18:13): Yeah, again, we try to get, we, we focus very, very heavily on this affirming and qualifying idea. And, you know, we give examples of, hey, listen, there is a chairman of armed services who does not have a great sustainability stance and is kind of a climate change denier, right? And whereas we wish his stance on sustainability and climate were very different, we are qualifying him because of his position on armed services. And as, you know, one of our biggest customers and important for what we do, we want to engage with this member on those areas on, on the armed service area, and that's the solely qualifying area. And for some that doesn't fly, right? And, and they kind of want ideological purity in, in some of these areas. And, and if we've had blowback, it's about, Hey, you know, I'm glad you're now giving to these people who, with whom I agree, I still hate these people and wish you didn't do it. Michael Kennedy (19:17): And I think what's wrong, against our values or whatever it is. So that's always a challenge, I think, and if anybody here has figured out how to solve that, I'm all ears. But I think what we again, try to focus on is affirmative qualifying ideas and saying, and, and then when we give the justifications across the board, we tell people why we're affirming them. And with the employee resource group kind of focus areas, that is generally the sole criteria that we give. And if they happen to be, you know, a member of another committee or in leadership or something like that it's great it is a great opportunity for us to kind of maximize that, but we try to focus on that sole qualifier because then it, it gets into that affirming side, but, you know, it's not without risk on that side. Claire McDonough (20:14): To our attendees, if you look on where the chat is, there's a little button there for polls. We have two polls up and we hope that you'll take our little mini polls so that we can get a sense of what the two poll questions we have up right now are whether you have ERG representation on your PAC board currently, and also whether your PAC has resumed contributions to the 147. We're gonna start talking in a second a little bit about the next steps and strategies going forward. And so those are some of the questions. We'll come back and we'll talk about those results in a few minutes. So what do you think about in terms of the next steps, now that you have all of this here and you've done a great job of making this all happen during the pandemic when all of these issues have sort of come up, but how do you think that this is all gonna impact things differently for the next cycle? And how might the change in the control of the House and the Senate change the disbursement dynamic and the conversations you're gonna need to have with your pods in the next year or so? Michael Kennedy (21:24): Yeah, I mean, I think that one of those poll questions there is relevant to that, and it's the 147, and if, you know, if it seems more likely than not that the House is going to be controlled by the Republicans you get into a situation where, you know, is the, is the PAC not going to give to all of House leadership into many of the Chairmen in waiting? And, and I think that's a difficult strategic argument to make. And so, you know, again, I'd be very interested in, in the expertise of the people who are on attending this event to hear what their thoughts are. But we've started to think of, and, and give to, you know, select members of the 147. We've used many, some of the tools out there that do some of the analyses that show, you know, who's doing what and who's saying what. Michael Kennedy (22:24): And we try to, you know, differentiate internally around people who had concerns about voting irregularities in certain states rather than continued election deniers and things like that. And, and the nuances there. But, again, we go back to we are a strategic company. The PAC is a strategic tool as part of the government relations team, and to ignore a large portion of Congress and disqualify them is probably not strategic. And so, yes, we have to take all of these things into consideration. We have to put things on the scale and balance things out. But again, we're, we are trying to find affirming ways to qualify people rather than negative ways to disqualify people. Claire McDonough (23:18): Interesting. and do you what, talk about a little bit about the transparency outside of just your employee resource group in terms of sharing with all of your contributors about your disbursements and your disbursement criteria. Michael Kennedy (23:38): Yeah, and, and you know, that doesn't go you know, wide to the general public, mostly because of FEC requirements is that you know, a lot of these things have to be, you have to be PAC qualified in order to kind of see a lot of the things that we put on our PAC website. But knowing that donations and disbursements eventually are filed and, and, and become public, we are pretty open about that. And we try to publish the reasons and the qualifications that we use for these. And so you know, my terrific team here in US Federal thinks through those issues very carefully and tries to say, Okay, these are the reasons why we're supporting these members. And, again, when it comes back to these new board members who are vocal and who have a platform and can you know, whip up employee sentiment pretty quickly, we, we pre-socialize a lot of these discussions and saying, Hey, listen, you know, here are two members of the 147 that we're planning on giving to this cycle. Michael Kennedy (24:48): Here are the reasons why and, you know, let me know if, when we get into the board meeting if you're gonna have a problem with it. Cause I'd love to discuss that beforehand and resolve any questions or concerns you might have. And so it's allowed us to do the work that we need to do to pre-socialize these things, but it also enables us then to have many more points of contact with our pod leaders and, and to be able to you know, have, have better relationships across the board, which is, I view as a positive. Claire McDonough (25:23): How long did it take you to put together the new structure and between changing, adding some new things to your criteria, and getting the approvals to add the pod representation? I'm thinking, you know, I think we've all learned over the last two years, there are so many things that will happen that you have no expectation that you're gonna have to manage. And I think everybody's learned a lot of adaptability and a lot of survival skills from that. But how is what we've all gone through the last two years and the emergence of the pods and the employee resource groups help prepare you for future challenges that are inevitably coming down the pike and you just don't know when they will? Michael Kennedy (26:05): Yeah, I think, you know, to answer the first part of your question, I think conceptually it was very easy to get support for this. Thinking through, you know, I know that some people have not added ERGs directly to their boards. They've created separate kinds of advisory panels and, you know, there are reasons to do that and maybe practical reasons and just kind of expediency reasons for how board meetings go and, and the decision process goes for different people's bylaws. For us, it was pretty simple to say, okay, you know I think in the aftermath of, of Black Lives Matter and things like that, there was just such a will, a desire to make an impact and to show that we're listening and that there is, that VMware cares about these communities and that we want to have, you know, this not just be talk but we wanna walk the talk. Michael Kennedy (27:03): So conceptually it was pretty easy to say, Hey, listen, this is what I proposed. This is what I think we should do. The practicality of then kind of going to the pod leaders and saying, Okay, there's this public election committee, and here's what it is, here's what it isn't. You know, would you be interested in joining the board? And there, you know, some people were very enthusiastic and wanted to jump in. Some people were pretty skeptical and had to be convinced. So, you know, I think the devil was always in the details on some of these things, but we, we were able to move pretty quickly cuz our CEO was engaged and there was a lot of support across the company for actually taking action at that time. I think in the future planning and future engagement and things that will pop up in kind of the ESG world and the inevitability for what all government relations functions are now dealing with I think it's prepared us in the sense that we now have relationships with these leaders. Michael Kennedy (28:01): And so instead of, you know, the black pod leader contacting somebody, contacting the CEO, it's our friend Latrice who's contacting the CEO. And so I can now call Latrice and say, Hey you know, I, I'd love to hear your thoughts on this, and we have a relationship and we know each other and there's just kind of a foundation of trust that we can then work on solutions for. And so, again, for me, there have been, you know, very little downside to this inclusion within our PAC structure. And, and I think it has been a, a win win win across the board. Claire McDonough (28:40): I'm interested in some of the conferences and other things where I've seen  this conversation happening. How has the emergence of the pods and employee resource groups, and you're including them on your PAC board, impacted other divisions within your organization, say your communications team or other things, do other people look at this and say, now, oh, this is a really interesting thing about looking and getting the perspectives and the input from these groups in terms of our communications and other things? Is this replicable? How are other people on your peers looking at this structure that you have in place? Michael Kennedy (29:26): Yeah, and people may disagree with me on this but my feeling is that government affairs is turning more into corporate affairs mm-hmm. <Affirmative> and that we can't either. So some of those stakeholders you've mentioned, we can't operate in vacuums or in silos, to deal with these things. And that talking to stakeholders, whether internal or external requires coordination between HR and communications and the ESG office and the office of the CEO and all those kinds of things. And so it ends up being much more of a coordinated corporate affairs function, even though we don't have an official corporate affairs function, right? Mm-Hmm. But it, but we kind of act that way. I think this has enabled that, it was easy for us because our chief comms officer other people were already on the PAC board, and so they knew where we were going with that, and it was just easy for us to coordinate that, but it becomes much more tightly integrated and allows us, again, the familiarity and the trust to, to deal with other issues as they arise. Claire McDonough (30:40): What we, oh, let's talk about our polls. So it looks like currently, a hundred percent responded, and I can't see how many people replied, but a hundred percent say they have resumed contributions to the 147. So that is interesting. And it's a 50-50 split between folks who have employee resource group representation on their backboards. There's still time to take those. So lets you ready to open it up for Q and A. Ready for some questions? Michael Kennedy (31:13): Absolutely. Claire McDonough (31:15): All right. Folks, please go to the Q and A box and send some questions our way. Michael Kennedy (31:22): It looks like there was a question in the chat about feedback from consumers and customers about our donation strategy. If VMware is, is not a super consumer-facing company, and it's kind of the one instance where being the biggest company, no one's ever heard of, maybe an advantage in that we don't, you know, no one gets famous off of our brand and, and beating up our brand or boycotting our brand, I would say we are careful, of course, about what our customers think we are. We listen to them, we listen to people who use us and, and our products, and we care deeply about that. But we don't get a lot of feedback there. You know, sometimes we hear from people saying, you know, why did this member, why that member and specific individuals? And we generally try to avoid getting into, you know, individual conversations about individuals. And sometimes I'll call if it's an employee or something that I'll call up and have a chat about, you know, what the PAC does and what the PAC doesn't. And that, you know, the team has a strategy over, you know, the four, four pillars that we use. But you know, I'm probably not the best person to answer that question just because we're not a consumer brand. Claire McDonough (32:50): Do you have, what kind of listening posts do you have to track or hear what people are saying about your politics out in the, on the internet or on Twitter? Or is it just really not a problem for all the reasons you stated before? Michael Kennedy (33:05): Listen, we track all of them, and our comms team tracks it all. And, even our internal Slack channels and, you know, we look for hotspots and all these kinds of things. And, again, what I would say is the risk is, is that, you know, our strategy is not one of ideological purity, right? Mm-Hmm. <affirmative>. And I think if there are members of employee resource groups or other employees who want ideological purity, it's just difficult to deliver that. Maybe you can deliver it for a pocket of the company, but there, you know, inevitably another pocket of the company will not like what you're delivering. And so we try to be, again, as strategic as possible and to cover as many areas as we can as part of our strategy. Claire McDonough (34:00): Wow. We're waiting hopefully for more questions. I'm gonna ask you the question from the icebreaker. What was your favorite PAC trip and why you ever went on? Michael Kennedy (34:09): Oh, gosh. Claire McDonough (34:10): Or hosted for that reason, potentially. Michael Kennedy (34:15): I'm gonna take the easy out on this, and I'm just gonna say that our, these ERG-related fundraisers that we've hosted mm-hmm. <Affirmative> have actually been really, really fun. And they just, they're just different. And it's a different conversation. The member shows differently, and you see I mean, like we had when one of the women's events we did, the member and some of our pod leaders were kind of crying together about shared experiences and why they got into politics and, and it's just a different situation to have non-GR people sitting around the table having a conversation about things that are naturally, naturally passionate about. And what I would say is I would be delighted for others to join us in these fundraisers. So if people are interested feel free to reach out to me. Michael Kennedy (35:10): My email is mkennedy@VMware. And I would, I'd be delighted to include people. And, you know, from the beginning, we knew that our PAC wasn't that big, and we always thought that this would outgrow us in a certain sense, and that there would be other companies that would say, Hey, I wanna do a similar event for this member, and maybe VMware doesn't have the budget for that member, but if there are other people willing to do this and carry this on you know, I just, I think it's a good thing for Washington. I think it's a good thing for corporate America, and it's a positive that can be affiliated with PS that in, in today's environment, it is not a positive generally, you know, people super PACs have kind of ruined some of that, I think as well. But I think we viewed, you know, corporate PACs and there's ac academia around this that they're moderating, moderating influence and they're an important part of kind of the political discussion. Claire McDonough (36:13): Oh, we have a question, and this is one that I have, I spent a lot of time personally working on for our clients over the pandemic. Have you considered letting donors designate which politicians they want to contribute to and sort of doing designations, designated giving? Michael Kennedy (36:31): The answer is yes, we have considered that. And, and that actually has some roots in VMware's giving strategy in general. Our foundation uses something that we call citizen philanthropy, where our foundation doesn't just give, you know, 2 million from VMware to, you know, Girls Who Code or something like that. We distribute dollars to every employee who has a certain amount every year to give to whatever not for profit that they see fit. And they kind of view it as, you know a million drops of rain equal to a waterfall and things like that. And that, you know, there will be ebbs and flows, and sometimes they get encouraged to, you know, here are some you know, Black Lives Matter related charities, here are some other, if there's a natural disaster or something, here are places you can give. But generally, that citizen philanthropy is something that is, is kind of a core thing in the PAC because we're so small or relatively small. Michael Kennedy (37:31): We've avoided that because what we've seen and when we've kind of asked is some people will come and say, well, we should, you know, we should give to Bernie. And we say, Okay, well, you know, Senator Sanders doesn't take PAC dollars. Well, you know, we should give to him anyway. And so it, you know, it becomes a little bit difficult in that we try to listen of course, but again, we want this to be a strategic tool and something that the government relations team is using as a strategy, and we try to get as much input as possible. But no, we haven't, we, we haven't gone that direction yet. Claire McDonough (38:08): So I'm not sure if the person who asked this question was asking about specific candidates as opposed to designating. So this is one of the things we've worked a lot on with some clients, which is allowing them to designate that their PAC dollars only go to Republican candidates or Democratic candidates as opposed to individuals which has own it's own special problems as well, to administer. Michael Kennedy (38:33): Yeah. Yeah. Listen, I think, think we could do that. And, you know, we've, we've talked about that. For me, it felt from our end, it felt a little disingenuous because we knew we had a bi, we have a mandate you know, bylaws mandate for bipartisanship and bicameralism. And so if some, if, if they say, Oh, you know, say 90% of our donors say, Okay, well, we want to give to Democrats, then we would probably go to our entire C-suite who generally max out to the PAC and we say, Okay, we need you to designate all of your money to Republicans just so we can have a balance, right? And so it, it felt, you know, that decision on our side felt a little disingenuous. Right now, again, we try to be as close to 50-50 as we can. Right now we trend, trend a little more Democrat in our giving and, and we trend a little more House to our giving as you know, one would expect right now. Claire McDonough (39:32): Are there any final questions out there? And if not, I will have any last final words or advice, or ideas that you wanna share with Michael Kennedy (39:48): Folks? Listen, I'm delighted that I had this opportunity and, and ability to talk about this if people are interested in helping and improving our process and participating in some of these fundraisers that we do. Again, I'm, I am very interested in hearing ideas and welcome diversity of thought and also participation in some of these things. So please reach out and, and give me ideas. And, again, thank you for the opportunity and thanks to people for tuning in. Claire McDonough (40:20): Absolutely. Thank you so much for agreeing to be our Wonk Week presenter. And for all of you again, we will be posting and emailing the sessions and stay tuned and hear more about Quorum PAC, which will be coming to you soon. Thanks so much, Michael. Michael Kennedy (40:38): Thank you. Claire McDonough (40:40): Happy. See you Wonk Week, 2023. Everybody. [post_title] => Expanding PAC Engagement with Employee Resource Groups [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => expanding-pac-engagement-employee-resource-groups [to_ping] => [pinged] => [post_modified] => 2022-10-14 02:48:45 [post_modified_gmt] => 2022-10-14 02:48:45 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.quorum.us/?post_type=resources&p=7678 [menu_order] => 0 [post_type] => resources [post_mime_type] => [comment_count] => 0 [filter] => raw ) [queried_object_id] => 7678 [request] => SELECT wp_posts.* FROM wp_posts WHERE 1=1 AND wp_posts.post_name = 'expanding-pac-engagement-employee-resource-groups' AND wp_posts.post_type = 'resources' ORDER BY wp_posts.post_date DESC [posts] => Array ( [0] => WP_Post Object ( [ID] => 7678 [post_author] => 27 [post_date] => 2022-10-14 02:48:45 [post_date_gmt] => 2022-10-14 02:48:45 [post_content] => [embed]https://youtu.be/-5aiuZ9F6ng[/embed] Claire McDonough (00:05): Hi, good afternoon, and welcome to our last session of Wonk week. We hope you've enjoyed the many great sessions, and if you've missed any, we'll be sharing out recordings via email and on the Quorum website. You can access anything you might have missed over the course of the week. I'm really excited to lead this session for all of our PAC people out there today. My name is Claire McDonough and I'm a senior account executive at Quorum with a focus on our PAC product. Last year when Quorum hosted Wonk Week, we didn't have a PAC product, but last December, the CisionPAC team joined Quorum, and we've been working hard to bring you a new PAC solution. So please be on the lookout for a future announcement about the launch of Quorum PAC. Our session today is gonna be a conversation about how to leverage employee resource groups into your PAC engagement strategy with the midterms right around the corner, I'm sure you all are all starting to think about your 2023 and 2024 to-do lists. Claire McDonough (01:01): And if thinking about where your ERGs fit into those plans isn't on your to-do list, it should be after our session today. So throughout the session please feel free to use the chat window to engage with your fellow attendees and to add your questions that Michael will answer towards the end of our conversation. And we'll have a few polls along the way to help drive our conversation as well. So, with that, I am thrilled to be joined by Michael Kennedy, the Senior Vice President of Global Government Relations and Public Policy at VMware. Michael is the Senior Vice President for Global Government Relations and has led VMware's global GR team since 2014. Prior to VMware many of you may have known him as the Chief of staff for Senator Hatch of Utah, and he was previously the Vice President for Federal and State Relations at Utah State University and as a lobbyist at Lee Smith. Thank you so much, Michael, for joining us today. We're delighted you're here and let's just dive right into this top. So to get us started, why don't you tell us a little bit about VMware PAC, and can you give us an overrule overview of your role in managing the PAC and what your PAC team structure is? Michael Kennedy (02:19): Well, first thanks for having me. I'm delighted to be here and grateful to Quorum for the opportunity. Thanks to everybody for tuning in as well, and I hope it'll be a good interactive discussion. So thanks for having me. VMware's PAC is not huge like many who may be on this call. And it's not tiny either. I think I try to just drive it as respectable. We're about 250k a cycle and that allows us to kind of participate and be out there without it being all-consuming. Like many people who were joining us today it's, it's been very difficult to grow the PAC and, and overcome kind of skeptical employees within the company especially given recent political polarization and environments and the like. But I view it as a critical tool for us and a strategic tool, and we try to be a strategic company VMware for those who don't know, you're in great company. We're kind of the biggest tech company no one's ever heard of. We're a software company that provides cloud infrastructure and cybersecurity and other kinds of plumbing for the cloud and the internet. Claire McDonough (03:38): So what has the 2022 election cycle looked like for you, and how has it different from past years? Michael Kennedy (03:45): Yeah, you know, generally our PAC is a, you know, by mandate and by bylaw, we're a bipartisan bicameral PAC. So we've tried to always think about both sides of the aisle, both chambers both sides of the capital, and be strategic that way. I think 2022 has changed in a sense because we, like many people, took a strategic pause after January 6th and some of the aftermath there. And we have, you know, ramp back up, but we're still kind of negotiating the 147 and, and other aspects that are part of that fallout. Claire McDonough (04:32): So focusing and talking a little bit more in-depth about the original pillars of your disbursement strategy and a regular cycle, what does your disbursement strategy look like and how has that had to change or pivot over the events of the last two years? Michael Kennedy (04:49): Yeah, you know, that's a great question. And previous to what I would say really was George Floyd's murder and, and some of the events that came out of that we were typical PAC criteria. It was very business-focused, business outcome-focused, and we had kind of three main pillars. One was we gave to people who represented our office locations and where we had a lot of employees we gave to leadership in, on both sides of the aisle and the Senate and the House. And then we gave to members of committees who were relevant jurisdictions and were relevant to our core business. And, you know, once George Floyd was murdered and people started paying attention a lot more to some of the ESG issues that were surrounded political giving, we, we received some criticism from our ERGs and some concerned employees about giving to members who had an F rating from the NAACP, for example. Michael Kennedy (05:59): And we had to explain, you know, a couple of things, one, that we don't follow scorecards in general because scorecards are generally based around votes, and giving money for votes is, is the textbook definition of a bribe. So we had to kind of explain that. We have to be very careful about how we qualify people to receive PAC donations. The other side that we emphasize is that I believe every Republican had an F rating from the NAACP including, you know, members like Tim Scott and others. And so we kind of the partisan nature of those, of some rankings, we are able to kind of say, listen, we don't follow all these things because they tend to be partisan and we're bipartisan in nature. The other thing that we emphasize is that what we try to do is we try to qualify and, and affirm some of these areas rather than disqualify them in a negative way. Michael Kennedy (07:00): And I think as soon as you start finding reasons to disqualify people it became evident that, you know, I can find 535 reasons pretty quickly to disqualify probably every member of Congress based off of the thousands of votes and positions and tweets and other things they do every year. So after this happened, we did think about this and we said, Okay, we wanna listen to our employee resources group. We call 'em pods at, at VMware, the power of difference groups we call 'em. So if I say pod I mean ERG but and so we said, Okay, how do we include these communities within our organization and how do we, you know, get them involved and, and make this a positive for VMware government relations for VMware PAC and, and kind of get some energy behind that. Michael Kennedy (07:53): So the two things that we did that were kind of transformational for us were, one, we added every pod leader to our PAC board of directors. And we added our vice president of diversity, equity, and inclusion and our chief people officer to the board. And that effectively doubled the board count, and the board was primarily our C-suite and then me and our head of public sector sales. And so it doubled in effect the size of the board and the pod, the ERG members were pretty enthusiastic about, but they were skeptical at first. So I don't wanna learn what this means and things, but the ability to continue to have another platform to be passionate about their issues was positive and the executive exposure was also very positive. The second thing that we did is we added a fourth pillar to that giving criteria. And we said, okay, we can now qualify people solely based on our values and what we call our 2030 goals. And so we were then able to say, okay, this person, this individual may be bad in general on some of our business issues and whether it's taxes or, you know, trade or some of the other traditional business issues. But if they're terrific on LGBTQ issues that can be the sole qualifier for giving them a PAC check. And those two things have been pretty transformational. Claire McDonough (09:32): Interesting. And so, in terms of how their participation now on the PAC board has changed your disbursements and your disbursement strategy, is it been just finding those creative ways to allow you to expand those disbursements to other people that may not be an industry-focused disbursement? Can you talk a little bit more about that and what that conversation look like internally, to the extent that you can share it? Michael Kennedy (10:03): Yeah. Listen, I don't think this is without risk, right? Mm-Hmm. <affirmative> and, and so once you bring more voices in who have political positions and political ideologies and the like, which is kind of everybody, it complicates the strategy behind what a government relations team is to be. So we've had to have a lot of conversations with the board members to say, this is a board not an executive team for the PAC mm-hmm. <Affirmative>. And so we encourage them to give us thoughts and ideas and feedback, but we generally approach them on, hey, we think this member is really good on women's issues. Or we think these five members are really good on women's issues. What do you think? Who do you think would be, you know, the right people, You know, do you wanna look into their issues? Michael Kennedy (10:56): Here are some tweets, here's some, you know, bills they've sponsored, here are some positions they've taken. And then, we get the feedback from them. We don't really allow for a veto per se. And we don't just give a blank check over to say, hey, here's some money that you can disperse for women's issues or LGBTQ issues, or black issues or Latino issues, or whatever it might be. And, and so it's not, they are not the executives, the GR team retains kind of that executive authority and the strategy behind it, but we look for them to be the advisors in that. Claire McDonough (11:34): How often do you meet with the individual pods to talk about, what's going on with the PAC and to do education or to do some fundraising within the pods? And have you seen now that you have developed an engagement strategy with them, has it increased your contributions from those employees at all? Michael Kennedy (11:53): Yeah, and this has been kind of the win-win-win scenario of this, is that it's allowed us to engage with them in many ways. And the PAC becomes kind of the initial conversation, right? They're now part of a board. They have to think through some of these issues. They have to get involved politically and, and think through the strategy as VMware in these areas. Most of the people who are our pod leaders, you know, are engineers or in the sales org or, you know, doing different day jobs, and they don't think about what government relations does every day. So we've been able to do that. The other thing that changed for us is we have started, you know, before I talked about the size of our PAC and how it's respectable, but not big. Michael Kennedy (12:42): So we haven't really hosted to date a lot of PAC events. We would attend a lot and we'd show up and we'd talk about our software and the cool things that we're doing, and how we're changing the world and et cetera, et cetera. But we didn't really host a lot of events. The events we started hosting. And there are people who I've seen, the attendees who've joined us in this, and I'm grateful to them for it, is we've started hosting events that have been built around these issues. So we'll approach a member and say, hey, listen, you are a champion of the AAPI community and we would love to have a fundraiser based around your positions on championing the AAPI community. And we want to talk, we'll come in another time and we'll tell you about the cool things we're doing for, you know, software or medical devices or financial services or, or many of the things that, that other people do here. Michael Kennedy (13:35): But today we wanna talk about what we as corporate America are doing ourselves to support our AAPI community. And we wanna recognize you, the member, for being a champion for that community. And we're all gonna hand you a check saying, you know, please keep fighting like hell. Cause we recognize you. We wanna tell you what we're doing, what we care about. And for, so, for the member, they love it because they're recognized for things that they're not always recognized for and things that are, they're passionate about naturally. And it's not a run-of-the-mill fundraiser where it's, you know, people saying, you know, what's gonna happen with tax extenders? Or, you know, how does the NDAA play out? And it's, it's a different type of fundraiser and conversation. And then for them what we do is we invite all of the companies who attend to invite a plus one. Michael Kennedy (14:25): So we will bring our pod leaders either into Washington for an in-person event or onto Zoom to ask questions. And so these experts who are, have these, you know, wonderful, passionate stories about how they got involved in leading the community at VMware, or the other companies that join us, they had these terrific exchanges. They get to ask a member of Congress, you know, questions directly. Sometimes they get, get the selfie right if they're in town. And so then they go back to the, to their ERG and they say, Hey, listen, I was able to ask Senator so and so, or congresswoman so and so about this, and we had this, you know, terrific exchange and they liked our ideas and, you know, maybe they're gonna come and talk at our other event. And, and, and so they, they get fired up and it gets the ERGs fired up, right? And I think that the third win is that then for us as a company and for our CEOs and other executives, they get to say that, hey, listen, we're literally putting our money where our mouths are on these issues. And, you know, we're not just virtue signaling or talking about things or sending a tweet. We're, we're investing real dollars into some of these issues. And so I think it's been a win-win-win across the board. Claire McDonough (15:39): So in terms of your pod structures, are the people who are serving on your PAC board, are they elected by the other members of the pod to serve in this capacity? And was their participation and contribution to the PAC part of that requirement? Or did you just let that happen organically? Michael Kennedy (15:59): Well, we never require a PAC donation <laugh>. But it's, it's strongly encouraged if they wanna kind of be involved that they are generally global pod leaders mm-hmm. <Affirmative> and we've had to kind of think this through and it's evolved over time, where we now have kind of two classes. We have seven pods and then we add an eighth. So we have a Black pod, a Latino pod Asian pod, disability pod, pride pod, women pod and veterans pod. And then we add sustainability to that and involve our, and our kind of ESG sustainability offices in that. And so we've kind of created two classes. They served for two years, and we kind of stagger the classes so that they're not all coming in at once and relearning. And then we, we actually ask that those that overlap to happen so that then you can, when they're in their pod leadership, they generally are pod leaders for two years when they're elected. Michael Kennedy (16:58): And we ask one of those years to be on the board and then a kind of emeritus year to stay on off the board, but on the pod so that they can train the new leader to come in. So that's taken a little bit of evolution and learning, just when we had huge turnover for a couple of leadership areas and we were kind of starting from scratch, but it's been, again, generally very, very positive. And the engagement in the PAC and then just understanding what government relations do is great. Cuz when they fly out for these fundraisers, we then say, Hey, listen, we're gonna be on the hill doing these meetings anyway. Do you wanna join us? And you can talk about, you know, the other things that VMware does. And, so then they kinda get a, a better appreciation for just government relations as a function as well. Claire McDonough (17:47): So you've done a really good job of you know, bringing them in and providing a good structure and getting them engaged and help and putting some structure there. But how do you manage and navigate when they push back really strongly on a particular candidate? How do you navigate that conversation and what is your viewpoint and how do you get to an end solution decision about moving forward? Michael Kennedy (18:13): Yeah, again, we try to get, we, we focus very, very heavily on this affirming and qualifying idea. And, you know, we give examples of, hey, listen, there is a chairman of armed services who does not have a great sustainability stance and is kind of a climate change denier, right? And whereas we wish his stance on sustainability and climate were very different, we are qualifying him because of his position on armed services. And as, you know, one of our biggest customers and important for what we do, we want to engage with this member on those areas on, on the armed service area, and that's the solely qualifying area. And for some that doesn't fly, right? And, and they kind of want ideological purity in, in some of these areas. And, and if we've had blowback, it's about, Hey, you know, I'm glad you're now giving to these people who, with whom I agree, I still hate these people and wish you didn't do it. Michael Kennedy (19:17): And I think what's wrong, against our values or whatever it is. So that's always a challenge, I think, and if anybody here has figured out how to solve that, I'm all ears. But I think what we again, try to focus on is affirmative qualifying ideas and saying, and, and then when we give the justifications across the board, we tell people why we're affirming them. And with the employee resource group kind of focus areas, that is generally the sole criteria that we give. And if they happen to be, you know, a member of another committee or in leadership or something like that it's great it is a great opportunity for us to kind of maximize that, but we try to focus on that sole qualifier because then it, it gets into that affirming side, but, you know, it's not without risk on that side. Claire McDonough (20:14): To our attendees, if you look on where the chat is, there's a little button there for polls. We have two polls up and we hope that you'll take our little mini polls so that we can get a sense of what the two poll questions we have up right now are whether you have ERG representation on your PAC board currently, and also whether your PAC has resumed contributions to the 147. We're gonna start talking in a second a little bit about the next steps and strategies going forward. And so those are some of the questions. We'll come back and we'll talk about those results in a few minutes. So what do you think about in terms of the next steps, now that you have all of this here and you've done a great job of making this all happen during the pandemic when all of these issues have sort of come up, but how do you think that this is all gonna impact things differently for the next cycle? And how might the change in the control of the House and the Senate change the disbursement dynamic and the conversations you're gonna need to have with your pods in the next year or so? Michael Kennedy (21:24): Yeah, I mean, I think that one of those poll questions there is relevant to that, and it's the 147, and if, you know, if it seems more likely than not that the House is going to be controlled by the Republicans you get into a situation where, you know, is the, is the PAC not going to give to all of House leadership into many of the Chairmen in waiting? And, and I think that's a difficult strategic argument to make. And so, you know, again, I'd be very interested in, in the expertise of the people who are on attending this event to hear what their thoughts are. But we've started to think of, and, and give to, you know, select members of the 147. We've used many, some of the tools out there that do some of the analyses that show, you know, who's doing what and who's saying what. Michael Kennedy (22:24): And we try to, you know, differentiate internally around people who had concerns about voting irregularities in certain states rather than continued election deniers and things like that. And, and the nuances there. But, again, we go back to we are a strategic company. The PAC is a strategic tool as part of the government relations team, and to ignore a large portion of Congress and disqualify them is probably not strategic. And so, yes, we have to take all of these things into consideration. We have to put things on the scale and balance things out. But again, we're, we are trying to find affirming ways to qualify people rather than negative ways to disqualify people. Claire McDonough (23:18): Interesting. and do you what, talk about a little bit about the transparency outside of just your employee resource group in terms of sharing with all of your contributors about your disbursements and your disbursement criteria. Michael Kennedy (23:38): Yeah, and, and you know, that doesn't go you know, wide to the general public, mostly because of FEC requirements is that you know, a lot of these things have to be, you have to be PAC qualified in order to kind of see a lot of the things that we put on our PAC website. But knowing that donations and disbursements eventually are filed and, and, and become public, we are pretty open about that. And we try to publish the reasons and the qualifications that we use for these. And so you know, my terrific team here in US Federal thinks through those issues very carefully and tries to say, Okay, these are the reasons why we're supporting these members. And, again, when it comes back to these new board members who are vocal and who have a platform and can you know, whip up employee sentiment pretty quickly, we, we pre-socialize a lot of these discussions and saying, Hey, listen, you know, here are two members of the 147 that we're planning on giving to this cycle. Michael Kennedy (24:48): Here are the reasons why and, you know, let me know if, when we get into the board meeting if you're gonna have a problem with it. Cause I'd love to discuss that beforehand and resolve any questions or concerns you might have. And so it's allowed us to do the work that we need to do to pre-socialize these things, but it also enables us then to have many more points of contact with our pod leaders and, and to be able to you know, have, have better relationships across the board, which is, I view as a positive. Claire McDonough (25:23): How long did it take you to put together the new structure and between changing, adding some new things to your criteria, and getting the approvals to add the pod representation? I'm thinking, you know, I think we've all learned over the last two years, there are so many things that will happen that you have no expectation that you're gonna have to manage. And I think everybody's learned a lot of adaptability and a lot of survival skills from that. But how is what we've all gone through the last two years and the emergence of the pods and the employee resource groups help prepare you for future challenges that are inevitably coming down the pike and you just don't know when they will? Michael Kennedy (26:05): Yeah, I think, you know, to answer the first part of your question, I think conceptually it was very easy to get support for this. Thinking through, you know, I know that some people have not added ERGs directly to their boards. They've created separate kinds of advisory panels and, you know, there are reasons to do that and maybe practical reasons and just kind of expediency reasons for how board meetings go and, and the decision process goes for different people's bylaws. For us, it was pretty simple to say, okay, you know I think in the aftermath of, of Black Lives Matter and things like that, there was just such a will, a desire to make an impact and to show that we're listening and that there is, that VMware cares about these communities and that we want to have, you know, this not just be talk but we wanna walk the talk. Michael Kennedy (27:03): So conceptually it was pretty easy to say, Hey, listen, this is what I proposed. This is what I think we should do. The practicality of then kind of going to the pod leaders and saying, Okay, there's this public election committee, and here's what it is, here's what it isn't. You know, would you be interested in joining the board? And there, you know, some people were very enthusiastic and wanted to jump in. Some people were pretty skeptical and had to be convinced. So, you know, I think the devil was always in the details on some of these things, but we, we were able to move pretty quickly cuz our CEO was engaged and there was a lot of support across the company for actually taking action at that time. I think in the future planning and future engagement and things that will pop up in kind of the ESG world and the inevitability for what all government relations functions are now dealing with I think it's prepared us in the sense that we now have relationships with these leaders. Michael Kennedy (28:01): And so instead of, you know, the black pod leader contacting somebody, contacting the CEO, it's our friend Latrice who's contacting the CEO. And so I can now call Latrice and say, Hey you know, I, I'd love to hear your thoughts on this, and we have a relationship and we know each other and there's just kind of a foundation of trust that we can then work on solutions for. And so, again, for me, there have been, you know, very little downside to this inclusion within our PAC structure. And, and I think it has been a, a win win win across the board. Claire McDonough (28:40): I'm interested in some of the conferences and other things where I've seen  this conversation happening. How has the emergence of the pods and employee resource groups, and you're including them on your PAC board, impacted other divisions within your organization, say your communications team or other things, do other people look at this and say, now, oh, this is a really interesting thing about looking and getting the perspectives and the input from these groups in terms of our communications and other things? Is this replicable? How are other people on your peers looking at this structure that you have in place? Michael Kennedy (29:26): Yeah, and people may disagree with me on this but my feeling is that government affairs is turning more into corporate affairs mm-hmm. <Affirmative> and that we can't either. So some of those stakeholders you've mentioned, we can't operate in vacuums or in silos, to deal with these things. And that talking to stakeholders, whether internal or external requires coordination between HR and communications and the ESG office and the office of the CEO and all those kinds of things. And so it ends up being much more of a coordinated corporate affairs function, even though we don't have an official corporate affairs function, right? Mm-Hmm. But it, but we kind of act that way. I think this has enabled that, it was easy for us because our chief comms officer other people were already on the PAC board, and so they knew where we were going with that, and it was just easy for us to coordinate that, but it becomes much more tightly integrated and allows us, again, the familiarity and the trust to, to deal with other issues as they arise. Claire McDonough (30:40): What we, oh, let's talk about our polls. So it looks like currently, a hundred percent responded, and I can't see how many people replied, but a hundred percent say they have resumed contributions to the 147. So that is interesting. And it's a 50-50 split between folks who have employee resource group representation on their backboards. There's still time to take those. So lets you ready to open it up for Q and A. Ready for some questions? Michael Kennedy (31:13): Absolutely. Claire McDonough (31:15): All right. Folks, please go to the Q and A box and send some questions our way. Michael Kennedy (31:22): It looks like there was a question in the chat about feedback from consumers and customers about our donation strategy. If VMware is, is not a super consumer-facing company, and it's kind of the one instance where being the biggest company, no one's ever heard of, maybe an advantage in that we don't, you know, no one gets famous off of our brand and, and beating up our brand or boycotting our brand, I would say we are careful, of course, about what our customers think we are. We listen to them, we listen to people who use us and, and our products, and we care deeply about that. But we don't get a lot of feedback there. You know, sometimes we hear from people saying, you know, why did this member, why that member and specific individuals? And we generally try to avoid getting into, you know, individual conversations about individuals. And sometimes I'll call if it's an employee or something that I'll call up and have a chat about, you know, what the PAC does and what the PAC doesn't. And that, you know, the team has a strategy over, you know, the four, four pillars that we use. But you know, I'm probably not the best person to answer that question just because we're not a consumer brand. Claire McDonough (32:50): Do you have, what kind of listening posts do you have to track or hear what people are saying about your politics out in the, on the internet or on Twitter? Or is it just really not a problem for all the reasons you stated before? Michael Kennedy (33:05): Listen, we track all of them, and our comms team tracks it all. And, even our internal Slack channels and, you know, we look for hotspots and all these kinds of things. And, again, what I would say is the risk is, is that, you know, our strategy is not one of ideological purity, right? Mm-Hmm. <affirmative>. And I think if there are members of employee resource groups or other employees who want ideological purity, it's just difficult to deliver that. Maybe you can deliver it for a pocket of the company, but there, you know, inevitably another pocket of the company will not like what you're delivering. And so we try to be, again, as strategic as possible and to cover as many areas as we can as part of our strategy. Claire McDonough (34:00): Wow. We're waiting hopefully for more questions. I'm gonna ask you the question from the icebreaker. What was your favorite PAC trip and why you ever went on? Michael Kennedy (34:09): Oh, gosh. Claire McDonough (34:10): Or hosted for that reason, potentially. Michael Kennedy (34:15): I'm gonna take the easy out on this, and I'm just gonna say that our, these ERG-related fundraisers that we've hosted mm-hmm. <Affirmative> have actually been really, really fun. And they just, they're just different. And it's a different conversation. The member shows differently, and you see I mean, like we had when one of the women's events we did, the member and some of our pod leaders were kind of crying together about shared experiences and why they got into politics and, and it's just a different situation to have non-GR people sitting around the table having a conversation about things that are naturally, naturally passionate about. And what I would say is I would be delighted for others to join us in these fundraisers. So if people are interested feel free to reach out to me. Michael Kennedy (35:10): My email is mkennedy@VMware. And I would, I'd be delighted to include people. And, you know, from the beginning, we knew that our PAC wasn't that big, and we always thought that this would outgrow us in a certain sense, and that there would be other companies that would say, Hey, I wanna do a similar event for this member, and maybe VMware doesn't have the budget for that member, but if there are other people willing to do this and carry this on you know, I just, I think it's a good thing for Washington. I think it's a good thing for corporate America, and it's a positive that can be affiliated with PS that in, in today's environment, it is not a positive generally, you know, people super PACs have kind of ruined some of that, I think as well. But I think we viewed, you know, corporate PACs and there's ac academia around this that they're moderating, moderating influence and they're an important part of kind of the political discussion. Claire McDonough (36:13): Oh, we have a question, and this is one that I have, I spent a lot of time personally working on for our clients over the pandemic. Have you considered letting donors designate which politicians they want to contribute to and sort of doing designations, designated giving? Michael Kennedy (36:31): The answer is yes, we have considered that. And, and that actually has some roots in VMware's giving strategy in general. Our foundation uses something that we call citizen philanthropy, where our foundation doesn't just give, you know, 2 million from VMware to, you know, Girls Who Code or something like that. We distribute dollars to every employee who has a certain amount every year to give to whatever not for profit that they see fit. And they kind of view it as, you know a million drops of rain equal to a waterfall and things like that. And that, you know, there will be ebbs and flows, and sometimes they get encouraged to, you know, here are some you know, Black Lives Matter related charities, here are some other, if there's a natural disaster or something, here are places you can give. But generally, that citizen philanthropy is something that is, is kind of a core thing in the PAC because we're so small or relatively small. Michael Kennedy (37:31): We've avoided that because what we've seen and when we've kind of asked is some people will come and say, well, we should, you know, we should give to Bernie. And we say, Okay, well, you know, Senator Sanders doesn't take PAC dollars. Well, you know, we should give to him anyway. And so it, you know, it becomes a little bit difficult in that we try to listen of course, but again, we want this to be a strategic tool and something that the government relations team is using as a strategy, and we try to get as much input as possible. But no, we haven't, we, we haven't gone that direction yet. Claire McDonough (38:08): So I'm not sure if the person who asked this question was asking about specific candidates as opposed to designating. So this is one of the things we've worked a lot on with some clients, which is allowing them to designate that their PAC dollars only go to Republican candidates or Democratic candidates as opposed to individuals which has own it's own special problems as well, to administer. Michael Kennedy (38:33): Yeah. Yeah. Listen, I think, think we could do that. And, you know, we've, we've talked about that. For me, it felt from our end, it felt a little disingenuous because we knew we had a bi, we have a mandate you know, bylaws mandate for bipartisanship and bicameralism. And so if some, if, if they say, Oh, you know, say 90% of our donors say, Okay, well, we want to give to Democrats, then we would probably go to our entire C-suite who generally max out to the PAC and we say, Okay, we need you to designate all of your money to Republicans just so we can have a balance, right? And so it, it felt, you know, that decision on our side felt a little disingenuous. Right now, again, we try to be as close to 50-50 as we can. Right now we trend, trend a little more Democrat in our giving and, and we trend a little more House to our giving as you know, one would expect right now. Claire McDonough (39:32): Are there any final questions out there? And if not, I will have any last final words or advice, or ideas that you wanna share with Michael Kennedy (39:48): Folks? Listen, I'm delighted that I had this opportunity and, and ability to talk about this if people are interested in helping and improving our process and participating in some of these fundraisers that we do. Again, I'm, I am very interested in hearing ideas and welcome diversity of thought and also participation in some of these things. So please reach out and, and give me ideas. And, again, thank you for the opportunity and thanks to people for tuning in. Claire McDonough (40:20): Absolutely. Thank you so much for agreeing to be our Wonk Week presenter. And for all of you again, we will be posting and emailing the sessions and stay tuned and hear more about Quorum PAC, which will be coming to you soon. Thanks so much, Michael. Michael Kennedy (40:38): Thank you. Claire McDonough (40:40): Happy. See you Wonk Week, 2023. Everybody. [post_title] => Expanding PAC Engagement with Employee Resource Groups [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => expanding-pac-engagement-employee-resource-groups [to_ping] => [pinged] => [post_modified] => 2022-10-14 02:48:45 [post_modified_gmt] => 2022-10-14 02:48:45 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.quorum.us/?post_type=resources&p=7678 [menu_order] => 0 [post_type] => resources [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 1 [current_post] => -1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 7678 [post_author] => 27 [post_date] => 2022-10-14 02:48:45 [post_date_gmt] => 2022-10-14 02:48:45 [post_content] => [embed]https://youtu.be/-5aiuZ9F6ng[/embed] Claire McDonough (00:05): Hi, good afternoon, and welcome to our last session of Wonk week. We hope you've enjoyed the many great sessions, and if you've missed any, we'll be sharing out recordings via email and on the Quorum website. You can access anything you might have missed over the course of the week. I'm really excited to lead this session for all of our PAC people out there today. My name is Claire McDonough and I'm a senior account executive at Quorum with a focus on our PAC product. Last year when Quorum hosted Wonk Week, we didn't have a PAC product, but last December, the CisionPAC team joined Quorum, and we've been working hard to bring you a new PAC solution. So please be on the lookout for a future announcement about the launch of Quorum PAC. Our session today is gonna be a conversation about how to leverage employee resource groups into your PAC engagement strategy with the midterms right around the corner, I'm sure you all are all starting to think about your 2023 and 2024 to-do lists. Claire McDonough (01:01): And if thinking about where your ERGs fit into those plans isn't on your to-do list, it should be after our session today. So throughout the session please feel free to use the chat window to engage with your fellow attendees and to add your questions that Michael will answer towards the end of our conversation. And we'll have a few polls along the way to help drive our conversation as well. So, with that, I am thrilled to be joined by Michael Kennedy, the Senior Vice President of Global Government Relations and Public Policy at VMware. Michael is the Senior Vice President for Global Government Relations and has led VMware's global GR team since 2014. Prior to VMware many of you may have known him as the Chief of staff for Senator Hatch of Utah, and he was previously the Vice President for Federal and State Relations at Utah State University and as a lobbyist at Lee Smith. Thank you so much, Michael, for joining us today. We're delighted you're here and let's just dive right into this top. So to get us started, why don't you tell us a little bit about VMware PAC, and can you give us an overrule overview of your role in managing the PAC and what your PAC team structure is? Michael Kennedy (02:19): Well, first thanks for having me. I'm delighted to be here and grateful to Quorum for the opportunity. Thanks to everybody for tuning in as well, and I hope it'll be a good interactive discussion. So thanks for having me. VMware's PAC is not huge like many who may be on this call. And it's not tiny either. I think I try to just drive it as respectable. We're about 250k a cycle and that allows us to kind of participate and be out there without it being all-consuming. Like many people who were joining us today it's, it's been very difficult to grow the PAC and, and overcome kind of skeptical employees within the company especially given recent political polarization and environments and the like. But I view it as a critical tool for us and a strategic tool, and we try to be a strategic company VMware for those who don't know, you're in great company. We're kind of the biggest tech company no one's ever heard of. We're a software company that provides cloud infrastructure and cybersecurity and other kinds of plumbing for the cloud and the internet. Claire McDonough (03:38): So what has the 2022 election cycle looked like for you, and how has it different from past years? Michael Kennedy (03:45): Yeah, you know, generally our PAC is a, you know, by mandate and by bylaw, we're a bipartisan bicameral PAC. So we've tried to always think about both sides of the aisle, both chambers both sides of the capital, and be strategic that way. I think 2022 has changed in a sense because we, like many people, took a strategic pause after January 6th and some of the aftermath there. And we have, you know, ramp back up, but we're still kind of negotiating the 147 and, and other aspects that are part of that fallout. Claire McDonough (04:32): So focusing and talking a little bit more in-depth about the original pillars of your disbursement strategy and a regular cycle, what does your disbursement strategy look like and how has that had to change or pivot over the events of the last two years? Michael Kennedy (04:49): Yeah, you know, that's a great question. And previous to what I would say really was George Floyd's murder and, and some of the events that came out of that we were typical PAC criteria. It was very business-focused, business outcome-focused, and we had kind of three main pillars. One was we gave to people who represented our office locations and where we had a lot of employees we gave to leadership in, on both sides of the aisle and the Senate and the House. And then we gave to members of committees who were relevant jurisdictions and were relevant to our core business. And, you know, once George Floyd was murdered and people started paying attention a lot more to some of the ESG issues that were surrounded political giving, we, we received some criticism from our ERGs and some concerned employees about giving to members who had an F rating from the NAACP, for example. Michael Kennedy (05:59): And we had to explain, you know, a couple of things, one, that we don't follow scorecards in general because scorecards are generally based around votes, and giving money for votes is, is the textbook definition of a bribe. So we had to kind of explain that. We have to be very careful about how we qualify people to receive PAC donations. The other side that we emphasize is that I believe every Republican had an F rating from the NAACP including, you know, members like Tim Scott and others. And so we kind of the partisan nature of those, of some rankings, we are able to kind of say, listen, we don't follow all these things because they tend to be partisan and we're bipartisan in nature. The other thing that we emphasize is that what we try to do is we try to qualify and, and affirm some of these areas rather than disqualify them in a negative way. Michael Kennedy (07:00): And I think as soon as you start finding reasons to disqualify people it became evident that, you know, I can find 535 reasons pretty quickly to disqualify probably every member of Congress based off of the thousands of votes and positions and tweets and other things they do every year. So after this happened, we did think about this and we said, Okay, we wanna listen to our employee resources group. We call 'em pods at, at VMware, the power of difference groups we call 'em. So if I say pod I mean ERG but and so we said, Okay, how do we include these communities within our organization and how do we, you know, get them involved and, and make this a positive for VMware government relations for VMware PAC and, and kind of get some energy behind that. Michael Kennedy (07:53): So the two things that we did that were kind of transformational for us were, one, we added every pod leader to our PAC board of directors. And we added our vice president of diversity, equity, and inclusion and our chief people officer to the board. And that effectively doubled the board count, and the board was primarily our C-suite and then me and our head of public sector sales. And so it doubled in effect the size of the board and the pod, the ERG members were pretty enthusiastic about, but they were skeptical at first. So I don't wanna learn what this means and things, but the ability to continue to have another platform to be passionate about their issues was positive and the executive exposure was also very positive. The second thing that we did is we added a fourth pillar to that giving criteria. And we said, okay, we can now qualify people solely based on our values and what we call our 2030 goals. And so we were then able to say, okay, this person, this individual may be bad in general on some of our business issues and whether it's taxes or, you know, trade or some of the other traditional business issues. But if they're terrific on LGBTQ issues that can be the sole qualifier for giving them a PAC check. And those two things have been pretty transformational. Claire McDonough (09:32): Interesting. And so, in terms of how their participation now on the PAC board has changed your disbursements and your disbursement strategy, is it been just finding those creative ways to allow you to expand those disbursements to other people that may not be an industry-focused disbursement? Can you talk a little bit more about that and what that conversation look like internally, to the extent that you can share it? Michael Kennedy (10:03): Yeah. Listen, I don't think this is without risk, right? Mm-Hmm. <affirmative> and, and so once you bring more voices in who have political positions and political ideologies and the like, which is kind of everybody, it complicates the strategy behind what a government relations team is to be. So we've had to have a lot of conversations with the board members to say, this is a board not an executive team for the PAC mm-hmm. <Affirmative>. And so we encourage them to give us thoughts and ideas and feedback, but we generally approach them on, hey, we think this member is really good on women's issues. Or we think these five members are really good on women's issues. What do you think? Who do you think would be, you know, the right people, You know, do you wanna look into their issues? Michael Kennedy (10:56): Here are some tweets, here's some, you know, bills they've sponsored, here are some positions they've taken. And then, we get the feedback from them. We don't really allow for a veto per se. And we don't just give a blank check over to say, hey, here's some money that you can disperse for women's issues or LGBTQ issues, or black issues or Latino issues, or whatever it might be. And, and so it's not, they are not the executives, the GR team retains kind of that executive authority and the strategy behind it, but we look for them to be the advisors in that. Claire McDonough (11:34): How often do you meet with the individual pods to talk about, what's going on with the PAC and to do education or to do some fundraising within the pods? And have you seen now that you have developed an engagement strategy with them, has it increased your contributions from those employees at all? Michael Kennedy (11:53): Yeah, and this has been kind of the win-win-win scenario of this, is that it's allowed us to engage with them in many ways. And the PAC becomes kind of the initial conversation, right? They're now part of a board. They have to think through some of these issues. They have to get involved politically and, and think through the strategy as VMware in these areas. Most of the people who are our pod leaders, you know, are engineers or in the sales org or, you know, doing different day jobs, and they don't think about what government relations does every day. So we've been able to do that. The other thing that changed for us is we have started, you know, before I talked about the size of our PAC and how it's respectable, but not big. Michael Kennedy (12:42): So we haven't really hosted to date a lot of PAC events. We would attend a lot and we'd show up and we'd talk about our software and the cool things that we're doing, and how we're changing the world and et cetera, et cetera. But we didn't really host a lot of events. The events we started hosting. And there are people who I've seen, the attendees who've joined us in this, and I'm grateful to them for it, is we've started hosting events that have been built around these issues. So we'll approach a member and say, hey, listen, you are a champion of the AAPI community and we would love to have a fundraiser based around your positions on championing the AAPI community. And we want to talk, we'll come in another time and we'll tell you about the cool things we're doing for, you know, software or medical devices or financial services or, or many of the things that, that other people do here. Michael Kennedy (13:35): But today we wanna talk about what we as corporate America are doing ourselves to support our AAPI community. And we wanna recognize you, the member, for being a champion for that community. And we're all gonna hand you a check saying, you know, please keep fighting like hell. Cause we recognize you. We wanna tell you what we're doing, what we care about. And for, so, for the member, they love it because they're recognized for things that they're not always recognized for and things that are, they're passionate about naturally. And it's not a run-of-the-mill fundraiser where it's, you know, people saying, you know, what's gonna happen with tax extenders? Or, you know, how does the NDAA play out? And it's, it's a different type of fundraiser and conversation. And then for them what we do is we invite all of the companies who attend to invite a plus one. Michael Kennedy (14:25): So we will bring our pod leaders either into Washington for an in-person event or onto Zoom to ask questions. And so these experts who are, have these, you know, wonderful, passionate stories about how they got involved in leading the community at VMware, or the other companies that join us, they had these terrific exchanges. They get to ask a member of Congress, you know, questions directly. Sometimes they get, get the selfie right if they're in town. And so then they go back to the, to their ERG and they say, Hey, listen, I was able to ask Senator so and so, or congresswoman so and so about this, and we had this, you know, terrific exchange and they liked our ideas and, you know, maybe they're gonna come and talk at our other event. And, and, and so they, they get fired up and it gets the ERGs fired up, right? And I think that the third win is that then for us as a company and for our CEOs and other executives, they get to say that, hey, listen, we're literally putting our money where our mouths are on these issues. And, you know, we're not just virtue signaling or talking about things or sending a tweet. We're, we're investing real dollars into some of these issues. And so I think it's been a win-win-win across the board. Claire McDonough (15:39): So in terms of your pod structures, are the people who are serving on your PAC board, are they elected by the other members of the pod to serve in this capacity? And was their participation and contribution to the PAC part of that requirement? Or did you just let that happen organically? Michael Kennedy (15:59): Well, we never require a PAC donation <laugh>. But it's, it's strongly encouraged if they wanna kind of be involved that they are generally global pod leaders mm-hmm. <Affirmative> and we've had to kind of think this through and it's evolved over time, where we now have kind of two classes. We have seven pods and then we add an eighth. So we have a Black pod, a Latino pod Asian pod, disability pod, pride pod, women pod and veterans pod. And then we add sustainability to that and involve our, and our kind of ESG sustainability offices in that. And so we've kind of created two classes. They served for two years, and we kind of stagger the classes so that they're not all coming in at once and relearning. And then we, we actually ask that those that overlap to happen so that then you can, when they're in their pod leadership, they generally are pod leaders for two years when they're elected. Michael Kennedy (16:58): And we ask one of those years to be on the board and then a kind of emeritus year to stay on off the board, but on the pod so that they can train the new leader to come in. So that's taken a little bit of evolution and learning, just when we had huge turnover for a couple of leadership areas and we were kind of starting from scratch, but it's been, again, generally very, very positive. And the engagement in the PAC and then just understanding what government relations do is great. Cuz when they fly out for these fundraisers, we then say, Hey, listen, we're gonna be on the hill doing these meetings anyway. Do you wanna join us? And you can talk about, you know, the other things that VMware does. And, so then they kinda get a, a better appreciation for just government relations as a function as well. Claire McDonough (17:47): So you've done a really good job of you know, bringing them in and providing a good structure and getting them engaged and help and putting some structure there. But how do you manage and navigate when they push back really strongly on a particular candidate? How do you navigate that conversation and what is your viewpoint and how do you get to an end solution decision about moving forward? Michael Kennedy (18:13): Yeah, again, we try to get, we, we focus very, very heavily on this affirming and qualifying idea. And, you know, we give examples of, hey, listen, there is a chairman of armed services who does not have a great sustainability stance and is kind of a climate change denier, right? And whereas we wish his stance on sustainability and climate were very different, we are qualifying him because of his position on armed services. And as, you know, one of our biggest customers and important for what we do, we want to engage with this member on those areas on, on the armed service area, and that's the solely qualifying area. And for some that doesn't fly, right? And, and they kind of want ideological purity in, in some of these areas. And, and if we've had blowback, it's about, Hey, you know, I'm glad you're now giving to these people who, with whom I agree, I still hate these people and wish you didn't do it. Michael Kennedy (19:17): And I think what's wrong, against our values or whatever it is. So that's always a challenge, I think, and if anybody here has figured out how to solve that, I'm all ears. But I think what we again, try to focus on is affirmative qualifying ideas and saying, and, and then when we give the justifications across the board, we tell people why we're affirming them. And with the employee resource group kind of focus areas, that is generally the sole criteria that we give. And if they happen to be, you know, a member of another committee or in leadership or something like that it's great it is a great opportunity for us to kind of maximize that, but we try to focus on that sole qualifier because then it, it gets into that affirming side, but, you know, it's not without risk on that side. Claire McDonough (20:14): To our attendees, if you look on where the chat is, there's a little button there for polls. We have two polls up and we hope that you'll take our little mini polls so that we can get a sense of what the two poll questions we have up right now are whether you have ERG representation on your PAC board currently, and also whether your PAC has resumed contributions to the 147. We're gonna start talking in a second a little bit about the next steps and strategies going forward. And so those are some of the questions. We'll come back and we'll talk about those results in a few minutes. So what do you think about in terms of the next steps, now that you have all of this here and you've done a great job of making this all happen during the pandemic when all of these issues have sort of come up, but how do you think that this is all gonna impact things differently for the next cycle? And how might the change in the control of the House and the Senate change the disbursement dynamic and the conversations you're gonna need to have with your pods in the next year or so? Michael Kennedy (21:24): Yeah, I mean, I think that one of those poll questions there is relevant to that, and it's the 147, and if, you know, if it seems more likely than not that the House is going to be controlled by the Republicans you get into a situation where, you know, is the, is the PAC not going to give to all of House leadership into many of the Chairmen in waiting? And, and I think that's a difficult strategic argument to make. And so, you know, again, I'd be very interested in, in the expertise of the people who are on attending this event to hear what their thoughts are. But we've started to think of, and, and give to, you know, select members of the 147. We've used many, some of the tools out there that do some of the analyses that show, you know, who's doing what and who's saying what. Michael Kennedy (22:24): And we try to, you know, differentiate internally around people who had concerns about voting irregularities in certain states rather than continued election deniers and things like that. And, and the nuances there. But, again, we go back to we are a strategic company. The PAC is a strategic tool as part of the government relations team, and to ignore a large portion of Congress and disqualify them is probably not strategic. And so, yes, we have to take all of these things into consideration. We have to put things on the scale and balance things out. But again, we're, we are trying to find affirming ways to qualify people rather than negative ways to disqualify people. Claire McDonough (23:18): Interesting. and do you what, talk about a little bit about the transparency outside of just your employee resource group in terms of sharing with all of your contributors about your disbursements and your disbursement criteria. Michael Kennedy (23:38): Yeah, and, and you know, that doesn't go you know, wide to the general public, mostly because of FEC requirements is that you know, a lot of these things have to be, you have to be PAC qualified in order to kind of see a lot of the things that we put on our PAC website. But knowing that donations and disbursements eventually are filed and, and, and become public, we are pretty open about that. And we try to publish the reasons and the qualifications that we use for these. And so you know, my terrific team here in US Federal thinks through those issues very carefully and tries to say, Okay, these are the reasons why we're supporting these members. And, again, when it comes back to these new board members who are vocal and who have a platform and can you know, whip up employee sentiment pretty quickly, we, we pre-socialize a lot of these discussions and saying, Hey, listen, you know, here are two members of the 147 that we're planning on giving to this cycle. Michael Kennedy (24:48): Here are the reasons why and, you know, let me know if, when we get into the board meeting if you're gonna have a problem with it. Cause I'd love to discuss that beforehand and resolve any questions or concerns you might have. And so it's allowed us to do the work that we need to do to pre-socialize these things, but it also enables us then to have many more points of contact with our pod leaders and, and to be able to you know, have, have better relationships across the board, which is, I view as a positive. Claire McDonough (25:23): How long did it take you to put together the new structure and between changing, adding some new things to your criteria, and getting the approvals to add the pod representation? I'm thinking, you know, I think we've all learned over the last two years, there are so many things that will happen that you have no expectation that you're gonna have to manage. And I think everybody's learned a lot of adaptability and a lot of survival skills from that. But how is what we've all gone through the last two years and the emergence of the pods and the employee resource groups help prepare you for future challenges that are inevitably coming down the pike and you just don't know when they will? Michael Kennedy (26:05): Yeah, I think, you know, to answer the first part of your question, I think conceptually it was very easy to get support for this. Thinking through, you know, I know that some people have not added ERGs directly to their boards. They've created separate kinds of advisory panels and, you know, there are reasons to do that and maybe practical reasons and just kind of expediency reasons for how board meetings go and, and the decision process goes for different people's bylaws. For us, it was pretty simple to say, okay, you know I think in the aftermath of, of Black Lives Matter and things like that, there was just such a will, a desire to make an impact and to show that we're listening and that there is, that VMware cares about these communities and that we want to have, you know, this not just be talk but we wanna walk the talk. Michael Kennedy (27:03): So conceptually it was pretty easy to say, Hey, listen, this is what I proposed. This is what I think we should do. The practicality of then kind of going to the pod leaders and saying, Okay, there's this public election committee, and here's what it is, here's what it isn't. You know, would you be interested in joining the board? And there, you know, some people were very enthusiastic and wanted to jump in. Some people were pretty skeptical and had to be convinced. So, you know, I think the devil was always in the details on some of these things, but we, we were able to move pretty quickly cuz our CEO was engaged and there was a lot of support across the company for actually taking action at that time. I think in the future planning and future engagement and things that will pop up in kind of the ESG world and the inevitability for what all government relations functions are now dealing with I think it's prepared us in the sense that we now have relationships with these leaders. Michael Kennedy (28:01): And so instead of, you know, the black pod leader contacting somebody, contacting the CEO, it's our friend Latrice who's contacting the CEO. And so I can now call Latrice and say, Hey you know, I, I'd love to hear your thoughts on this, and we have a relationship and we know each other and there's just kind of a foundation of trust that we can then work on solutions for. And so, again, for me, there have been, you know, very little downside to this inclusion within our PAC structure. And, and I think it has been a, a win win win across the board. Claire McDonough (28:40): I'm interested in some of the conferences and other things where I've seen  this conversation happening. How has the emergence of the pods and employee resource groups, and you're including them on your PAC board, impacted other divisions within your organization, say your communications team or other things, do other people look at this and say, now, oh, this is a really interesting thing about looking and getting the perspectives and the input from these groups in terms of our communications and other things? Is this replicable? How are other people on your peers looking at this structure that you have in place? Michael Kennedy (29:26): Yeah, and people may disagree with me on this but my feeling is that government affairs is turning more into corporate affairs mm-hmm. <Affirmative> and that we can't either. So some of those stakeholders you've mentioned, we can't operate in vacuums or in silos, to deal with these things. And that talking to stakeholders, whether internal or external requires coordination between HR and communications and the ESG office and the office of the CEO and all those kinds of things. And so it ends up being much more of a coordinated corporate affairs function, even though we don't have an official corporate affairs function, right? Mm-Hmm. But it, but we kind of act that way. I think this has enabled that, it was easy for us because our chief comms officer other people were already on the PAC board, and so they knew where we were going with that, and it was just easy for us to coordinate that, but it becomes much more tightly integrated and allows us, again, the familiarity and the trust to, to deal with other issues as they arise. Claire McDonough (30:40): What we, oh, let's talk about our polls. So it looks like currently, a hundred percent responded, and I can't see how many people replied, but a hundred percent say they have resumed contributions to the 147. So that is interesting. And it's a 50-50 split between folks who have employee resource group representation on their backboards. There's still time to take those. So lets you ready to open it up for Q and A. Ready for some questions? Michael Kennedy (31:13): Absolutely. Claire McDonough (31:15): All right. Folks, please go to the Q and A box and send some questions our way. Michael Kennedy (31:22): It looks like there was a question in the chat about feedback from consumers and customers about our donation strategy. If VMware is, is not a super consumer-facing company, and it's kind of the one instance where being the biggest company, no one's ever heard of, maybe an advantage in that we don't, you know, no one gets famous off of our brand and, and beating up our brand or boycotting our brand, I would say we are careful, of course, about what our customers think we are. We listen to them, we listen to people who use us and, and our products, and we care deeply about that. But we don't get a lot of feedback there. You know, sometimes we hear from people saying, you know, why did this member, why that member and specific individuals? And we generally try to avoid getting into, you know, individual conversations about individuals. And sometimes I'll call if it's an employee or something that I'll call up and have a chat about, you know, what the PAC does and what the PAC doesn't. And that, you know, the team has a strategy over, you know, the four, four pillars that we use. But you know, I'm probably not the best person to answer that question just because we're not a consumer brand. Claire McDonough (32:50): Do you have, what kind of listening posts do you have to track or hear what people are saying about your politics out in the, on the internet or on Twitter? Or is it just really not a problem for all the reasons you stated before? Michael Kennedy (33:05): Listen, we track all of them, and our comms team tracks it all. And, even our internal Slack channels and, you know, we look for hotspots and all these kinds of things. And, again, what I would say is the risk is, is that, you know, our strategy is not one of ideological purity, right? Mm-Hmm. <affirmative>. And I think if there are members of employee resource groups or other employees who want ideological purity, it's just difficult to deliver that. Maybe you can deliver it for a pocket of the company, but there, you know, inevitably another pocket of the company will not like what you're delivering. And so we try to be, again, as strategic as possible and to cover as many areas as we can as part of our strategy. Claire McDonough (34:00): Wow. We're waiting hopefully for more questions. I'm gonna ask you the question from the icebreaker. What was your favorite PAC trip and why you ever went on? Michael Kennedy (34:09): Oh, gosh. Claire McDonough (34:10): Or hosted for that reason, potentially. Michael Kennedy (34:15): I'm gonna take the easy out on this, and I'm just gonna say that our, these ERG-related fundraisers that we've hosted mm-hmm. <Affirmative> have actually been really, really fun. And they just, they're just different. And it's a different conversation. The member shows differently, and you see I mean, like we had when one of the women's events we did, the member and some of our pod leaders were kind of crying together about shared experiences and why they got into politics and, and it's just a different situation to have non-GR people sitting around the table having a conversation about things that are naturally, naturally passionate about. And what I would say is I would be delighted for others to join us in these fundraisers. So if people are interested feel free to reach out to me. Michael Kennedy (35:10): My email is mkennedy@VMware. And I would, I'd be delighted to include people. And, you know, from the beginning, we knew that our PAC wasn't that big, and we always thought that this would outgrow us in a certain sense, and that there would be other companies that would say, Hey, I wanna do a similar event for this member, and maybe VMware doesn't have the budget for that member, but if there are other people willing to do this and carry this on you know, I just, I think it's a good thing for Washington. I think it's a good thing for corporate America, and it's a positive that can be affiliated with PS that in, in today's environment, it is not a positive generally, you know, people super PACs have kind of ruined some of that, I think as well. But I think we viewed, you know, corporate PACs and there's ac academia around this that they're moderating, moderating influence and they're an important part of kind of the political discussion. Claire McDonough (36:13): Oh, we have a question, and this is one that I have, I spent a lot of time personally working on for our clients over the pandemic. Have you considered letting donors designate which politicians they want to contribute to and sort of doing designations, designated giving? Michael Kennedy (36:31): The answer is yes, we have considered that. And, and that actually has some roots in VMware's giving strategy in general. Our foundation uses something that we call citizen philanthropy, where our foundation doesn't just give, you know, 2 million from VMware to, you know, Girls Who Code or something like that. We distribute dollars to every employee who has a certain amount every year to give to whatever not for profit that they see fit. And they kind of view it as, you know a million drops of rain equal to a waterfall and things like that. And that, you know, there will be ebbs and flows, and sometimes they get encouraged to, you know, here are some you know, Black Lives Matter related charities, here are some other, if there's a natural disaster or something, here are places you can give. But generally, that citizen philanthropy is something that is, is kind of a core thing in the PAC because we're so small or relatively small. Michael Kennedy (37:31): We've avoided that because what we've seen and when we've kind of asked is some people will come and say, well, we should, you know, we should give to Bernie. And we say, Okay, well, you know, Senator Sanders doesn't take PAC dollars. Well, you know, we should give to him anyway. And so it, you know, it becomes a little bit difficult in that we try to listen of course, but again, we want this to be a strategic tool and something that the government relations team is using as a strategy, and we try to get as much input as possible. But no, we haven't, we, we haven't gone that direction yet. Claire McDonough (38:08): So I'm not sure if the person who asked this question was asking about specific candidates as opposed to designating. So this is one of the things we've worked a lot on with some clients, which is allowing them to designate that their PAC dollars only go to Republican candidates or Democratic candidates as opposed to individuals which has own it's own special problems as well, to administer. Michael Kennedy (38:33): Yeah. Yeah. Listen, I think, think we could do that. And, you know, we've, we've talked about that. For me, it felt from our end, it felt a little disingenuous because we knew we had a bi, we have a mandate you know, bylaws mandate for bipartisanship and bicameralism. And so if some, if, if they say, Oh, you know, say 90% of our donors say, Okay, well, we want to give to Democrats, then we would probably go to our entire C-suite who generally max out to the PAC and we say, Okay, we need you to designate all of your money to Republicans just so we can have a balance, right? And so it, it felt, you know, that decision on our side felt a little disingenuous. Right now, again, we try to be as close to 50-50 as we can. Right now we trend, trend a little more Democrat in our giving and, and we trend a little more House to our giving as you know, one would expect right now. Claire McDonough (39:32): Are there any final questions out there? And if not, I will have any last final words or advice, or ideas that you wanna share with Michael Kennedy (39:48): Folks? Listen, I'm delighted that I had this opportunity and, and ability to talk about this if people are interested in helping and improving our process and participating in some of these fundraisers that we do. Again, I'm, I am very interested in hearing ideas and welcome diversity of thought and also participation in some of these things. So please reach out and, and give me ideas. And, again, thank you for the opportunity and thanks to people for tuning in. Claire McDonough (40:20): Absolutely. Thank you so much for agreeing to be our Wonk Week presenter. And for all of you again, we will be posting and emailing the sessions and stay tuned and hear more about Quorum PAC, which will be coming to you soon. Thanks so much, Michael. Michael Kennedy (40:38): Thank you. Claire McDonough (40:40): Happy. See you Wonk Week, 2023. Everybody. 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Expanding PAC Engagement with Employee Resource Groups

Expanding PAC Engagement with Employee Resource Groups

Claire McDonough (00:05):

Hi, good afternoon, and welcome to our last session of Wonk week. We hope you’ve enjoyed the many great sessions, and if you’ve missed any, we’ll be sharing out recordings via email and on the Quorum website. You can access anything you might have missed over the course of the week. I’m really excited to lead this session for all of our PAC people out there today. My name is Claire McDonough and I’m a senior account executive at Quorum with a focus on our PAC product. Last year when Quorum hosted Wonk Week, we didn’t have a PAC product, but last December, the CisionPAC team joined Quorum, and we’ve been working hard to bring you a new PAC solution. So please be on the lookout for a future announcement about the launch of Quorum PAC. Our session today is gonna be a conversation about how to leverage employee resource groups into your PAC engagement strategy with the midterms right around the corner, I’m sure you all are all starting to think about your 2023 and 2024 to-do lists.

Claire McDonough (01:01):

And if thinking about where your ERGs fit into those plans isn’t on your to-do list, it should be after our session today. So throughout the session please feel free to use the chat window to engage with your fellow attendees and to add your questions that Michael will answer towards the end of our conversation. And we’ll have a few polls along the way to help drive our conversation as well. So, with that, I am thrilled to be joined by Michael Kennedy, the Senior Vice President of Global Government Relations and Public Policy at VMware. Michael is the Senior Vice President for Global Government Relations and has led VMware’s global GR team since 2014. Prior to VMware many of you may have known him as the Chief of staff for Senator Hatch of Utah, and he was previously the Vice President for Federal and State Relations at Utah State University and as a lobbyist at Lee Smith. Thank you so much, Michael, for joining us today. We’re delighted you’re here and let’s just dive right into this top. So to get us started, why don’t you tell us a little bit about VMware PAC, and can you give us an overrule overview of your role in managing the PAC and what your PAC team structure is?

Michael Kennedy (02:19):

Well, first thanks for having me. I’m delighted to be here and grateful to Quorum for the opportunity. Thanks to everybody for tuning in as well, and I hope it’ll be a good interactive discussion. So thanks for having me. VMware’s PAC is not huge like many who may be on this call. And it’s not tiny either. I think I try to just drive it as respectable. We’re about 250k a cycle and that allows us to kind of participate and be out there without it being all-consuming. Like many people who were joining us today it’s, it’s been very difficult to grow the PAC and, and overcome kind of skeptical employees within the company especially given recent political polarization and environments and the like. But I view it as a critical tool for us and a strategic tool, and we try to be a strategic company VMware for those who don’t know, you’re in great company. We’re kind of the biggest tech company no one’s ever heard of. We’re a software company that provides cloud infrastructure and cybersecurity and other kinds of plumbing for the cloud and the internet.

Claire McDonough (03:38):

So what has the 2022 election cycle looked like for you, and how has it different from past years?

Michael Kennedy (03:45):

Yeah, you know, generally our PAC is a, you know, by mandate and by bylaw, we’re a bipartisan bicameral PAC. So we’ve tried to always think about both sides of the aisle, both chambers both sides of the capital, and be strategic that way. I think 2022 has changed in a sense because we, like many people, took a strategic pause after January 6th and some of the aftermath there. And we have, you know, ramp back up, but we’re still kind of negotiating the 147 and, and other aspects that are part of that fallout.

Claire McDonough (04:32):

So focusing and talking a little bit more in-depth about the original pillars of your disbursement strategy and a regular cycle, what does your disbursement strategy look like and how has that had to change or pivot over the events of the last two years?

Michael Kennedy (04:49):

Yeah, you know, that’s a great question. And previous to what I would say really was George Floyd’s murder and, and some of the events that came out of that we were typical PAC criteria. It was very business-focused, business outcome-focused, and we had kind of three main pillars. One was we gave to people who represented our office locations and where we had a lot of employees we gave to leadership in, on both sides of the aisle and the Senate and the House. And then we gave to members of committees who were relevant jurisdictions and were relevant to our core business. And, you know, once George Floyd was murdered and people started paying attention a lot more to some of the ESG issues that were surrounded political giving, we, we received some criticism from our ERGs and some concerned employees about giving to members who had an F rating from the NAACP, for example.

Michael Kennedy (05:59):

And we had to explain, you know, a couple of things, one, that we don’t follow scorecards in general because scorecards are generally based around votes, and giving money for votes is, is the textbook definition of a bribe. So we had to kind of explain that. We have to be very careful about how we qualify people to receive PAC donations. The other side that we emphasize is that I believe every Republican had an F rating from the NAACP including, you know, members like Tim Scott and others. And so we kind of the partisan nature of those, of some rankings, we are able to kind of say, listen, we don’t follow all these things because they tend to be partisan and we’re bipartisan in nature. The other thing that we emphasize is that what we try to do is we try to qualify and, and affirm some of these areas rather than disqualify them in a negative way.

Michael Kennedy (07:00):

And I think as soon as you start finding reasons to disqualify people it became evident that, you know, I can find 535 reasons pretty quickly to disqualify probably every member of Congress based off of the thousands of votes and positions and tweets and other things they do every year. So after this happened, we did think about this and we said, Okay, we wanna listen to our employee resources group. We call ’em pods at, at VMware, the power of difference groups we call ’em. So if I say pod I mean ERG but and so we said, Okay, how do we include these communities within our organization and how do we, you know, get them involved and, and make this a positive for VMware government relations for VMware PAC and, and kind of get some energy behind that.

Michael Kennedy (07:53):

So the two things that we did that were kind of transformational for us were, one, we added every pod leader to our PAC board of directors. And we added our vice president of diversity, equity, and inclusion and our chief people officer to the board. And that effectively doubled the board count, and the board was primarily our C-suite and then me and our head of public sector sales. And so it doubled in effect the size of the board and the pod, the ERG members were pretty enthusiastic about, but they were skeptical at first. So I don’t wanna learn what this means and things, but the ability to continue to have another platform to be passionate about their issues was positive and the executive exposure was also very positive. The second thing that we did is we added a fourth pillar to that giving criteria. And we said, okay, we can now qualify people solely based on our values and what we call our 2030 goals. And so we were then able to say, okay, this person, this individual may be bad in general on some of our business issues and whether it’s taxes or, you know, trade or some of the other traditional business issues. But if they’re terrific on LGBTQ issues that can be the sole qualifier for giving them a PAC check. And those two things have been pretty transformational.

Claire McDonough (09:32):

Interesting. And so, in terms of how their participation now on the PAC board has changed your disbursements and your disbursement strategy, is it been just finding those creative ways to allow you to expand those disbursements to other people that may not be an industry-focused disbursement? Can you talk a little bit more about that and what that conversation look like internally, to the extent that you can share it?

Michael Kennedy (10:03):

Yeah. Listen, I don’t think this is without risk, right? Mm-Hmm. <affirmative> and, and so once you bring more voices in who have political positions and political ideologies and the like, which is kind of everybody, it complicates the strategy behind what a government relations team is to be. So we’ve had to have a lot of conversations with the board members to say, this is a board not an executive team for the PAC mm-hmm. <Affirmative>. And so we encourage them to give us thoughts and ideas and feedback, but we generally approach them on, hey, we think this member is really good on women’s issues. Or we think these five members are really good on women’s issues. What do you think? Who do you think would be, you know, the right people, You know, do you wanna look into their issues?

Michael Kennedy (10:56):

Here are some tweets, here’s some, you know, bills they’ve sponsored, here are some positions they’ve taken. And then, we get the feedback from them. We don’t really allow for a veto per se. And we don’t just give a blank check over to say, hey, here’s some money that you can disperse for women’s issues or LGBTQ issues, or black issues or Latino issues, or whatever it might be. And, and so it’s not, they are not the executives, the GR team retains kind of that executive authority and the strategy behind it, but we look for them to be the advisors in that.

Claire McDonough (11:34):

How often do you meet with the individual pods to talk about, what’s going on with the PAC and to do education or to do some fundraising within the pods? And have you seen now that you have developed an engagement strategy with them, has it increased your contributions from those employees at all?

Michael Kennedy (11:53):

Yeah, and this has been kind of the win-win-win scenario of this, is that it’s allowed us to engage with them in many ways. And the PAC becomes kind of the initial conversation, right? They’re now part of a board. They have to think through some of these issues. They have to get involved politically and, and think through the strategy as VMware in these areas. Most of the people who are our pod leaders, you know, are engineers or in the sales org or, you know, doing different day jobs, and they don’t think about what government relations does every day. So we’ve been able to do that. The other thing that changed for us is we have started, you know, before I talked about the size of our PAC and how it’s respectable, but not big.

Michael Kennedy (12:42):

So we haven’t really hosted to date a lot of PAC events. We would attend a lot and we’d show up and we’d talk about our software and the cool things that we’re doing, and how we’re changing the world and et cetera, et cetera. But we didn’t really host a lot of events. The events we started hosting. And there are people who I’ve seen, the attendees who’ve joined us in this, and I’m grateful to them for it, is we’ve started hosting events that have been built around these issues. So we’ll approach a member and say, hey, listen, you are a champion of the AAPI community and we would love to have a fundraiser based around your positions on championing the AAPI community. And we want to talk, we’ll come in another time and we’ll tell you about the cool things we’re doing for, you know, software or medical devices or financial services or, or many of the things that, that other people do here.

Michael Kennedy (13:35):

But today we wanna talk about what we as corporate America are doing ourselves to support our AAPI community. And we wanna recognize you, the member, for being a champion for that community. And we’re all gonna hand you a check saying, you know, please keep fighting like hell. Cause we recognize you. We wanna tell you what we’re doing, what we care about. And for, so, for the member, they love it because they’re recognized for things that they’re not always recognized for and things that are, they’re passionate about naturally. And it’s not a run-of-the-mill fundraiser where it’s, you know, people saying, you know, what’s gonna happen with tax extenders? Or, you know, how does the NDAA play out? And it’s, it’s a different type of fundraiser and conversation. And then for them what we do is we invite all of the companies who attend to invite a plus one.

Michael Kennedy (14:25):

So we will bring our pod leaders either into Washington for an in-person event or onto Zoom to ask questions. And so these experts who are, have these, you know, wonderful, passionate stories about how they got involved in leading the community at VMware, or the other companies that join us, they had these terrific exchanges. They get to ask a member of Congress, you know, questions directly. Sometimes they get, get the selfie right if they’re in town. And so then they go back to the, to their ERG and they say, Hey, listen, I was able to ask Senator so and so, or congresswoman so and so about this, and we had this, you know, terrific exchange and they liked our ideas and, you know, maybe they’re gonna come and talk at our other event. And, and, and so they, they get fired up and it gets the ERGs fired up, right? And I think that the third win is that then for us as a company and for our CEOs and other executives, they get to say that, hey, listen, we’re literally putting our money where our mouths are on these issues. And, you know, we’re not just virtue signaling or talking about things or sending a tweet. We’re, we’re investing real dollars into some of these issues. And so I think it’s been a win-win-win across the board.

Claire McDonough (15:39):

So in terms of your pod structures, are the people who are serving on your PAC board, are they elected by the other members of the pod to serve in this capacity? And was their participation and contribution to the PAC part of that requirement? Or did you just let that happen organically?

Michael Kennedy (15:59):

Well, we never require a PAC donation <laugh>. But it’s, it’s strongly encouraged if they wanna kind of be involved that they are generally global pod leaders mm-hmm. <Affirmative> and we’ve had to kind of think this through and it’s evolved over time, where we now have kind of two classes. We have seven pods and then we add an eighth. So we have a Black pod, a Latino pod Asian pod, disability pod, pride pod, women pod and veterans pod. And then we add sustainability to that and involve our, and our kind of ESG sustainability offices in that. And so we’ve kind of created two classes. They served for two years, and we kind of stagger the classes so that they’re not all coming in at once and relearning. And then we, we actually ask that those that overlap to happen so that then you can, when they’re in their pod leadership, they generally are pod leaders for two years when they’re elected.

Michael Kennedy (16:58):

And we ask one of those years to be on the board and then a kind of emeritus year to stay on off the board, but on the pod so that they can train the new leader to come in. So that’s taken a little bit of evolution and learning, just when we had huge turnover for a couple of leadership areas and we were kind of starting from scratch, but it’s been, again, generally very, very positive. And the engagement in the PAC and then just understanding what government relations do is great. Cuz when they fly out for these fundraisers, we then say, Hey, listen, we’re gonna be on the hill doing these meetings anyway. Do you wanna join us? And you can talk about, you know, the other things that VMware does. And, so then they kinda get a, a better appreciation for just government relations as a function as well.

Claire McDonough (17:47):

So you’ve done a really good job of you know, bringing them in and providing a good structure and getting them engaged and help and putting some structure there. But how do you manage and navigate when they push back really strongly on a particular candidate? How do you navigate that conversation and what is your viewpoint and how do you get to an end solution decision about moving forward?

Michael Kennedy (18:13):

Yeah, again, we try to get, we, we focus very, very heavily on this affirming and qualifying idea. And, you know, we give examples of, hey, listen, there is a chairman of armed services who does not have a great sustainability stance and is kind of a climate change denier, right? And whereas we wish his stance on sustainability and climate were very different, we are qualifying him because of his position on armed services. And as, you know, one of our biggest customers and important for what we do, we want to engage with this member on those areas on, on the armed service area, and that’s the solely qualifying area. And for some that doesn’t fly, right? And, and they kind of want ideological purity in, in some of these areas. And, and if we’ve had blowback, it’s about, Hey, you know, I’m glad you’re now giving to these people who, with whom I agree, I still hate these people and wish you didn’t do it.

Michael Kennedy (19:17):

And I think what’s wrong, against our values or whatever it is. So that’s always a challenge, I think, and if anybody here has figured out how to solve that, I’m all ears. But I think what we again, try to focus on is affirmative qualifying ideas and saying, and, and then when we give the justifications across the board, we tell people why we’re affirming them. And with the employee resource group kind of focus areas, that is generally the sole criteria that we give. And if they happen to be, you know, a member of another committee or in leadership or something like that it’s great it is a great opportunity for us to kind of maximize that, but we try to focus on that sole qualifier because then it, it gets into that affirming side, but, you know, it’s not without risk on that side.

Claire McDonough (20:14):

To our attendees, if you look on where the chat is, there’s a little button there for polls. We have two polls up and we hope that you’ll take our little mini polls so that we can get a sense of what the two poll questions we have up right now are whether you have ERG representation on your PAC board currently, and also whether your PAC has resumed contributions to the 147. We’re gonna start talking in a second a little bit about the next steps and strategies going forward. And so those are some of the questions. We’ll come back and we’ll talk about those results in a few minutes. So what do you think about in terms of the next steps, now that you have all of this here and you’ve done a great job of making this all happen during the pandemic when all of these issues have sort of come up, but how do you think that this is all gonna impact things differently for the next cycle? And how might the change in the control of the House and the Senate change the disbursement dynamic and the conversations you’re gonna need to have with your pods in the next year or so?

Michael Kennedy (21:24):

Yeah, I mean, I think that one of those poll questions there is relevant to that, and it’s the 147, and if, you know, if it seems more likely than not that the House is going to be controlled by the Republicans you get into a situation where, you know, is the, is the PAC not going to give to all of House leadership into many of the Chairmen in waiting? And, and I think that’s a difficult strategic argument to make. And so, you know, again, I’d be very interested in, in the expertise of the people who are on attending this event to hear what their thoughts are. But we’ve started to think of, and, and give to, you know, select members of the 147. We’ve used many, some of the tools out there that do some of the analyses that show, you know, who’s doing what and who’s saying what.

Michael Kennedy (22:24):

And we try to, you know, differentiate internally around people who had concerns about voting irregularities in certain states rather than continued election deniers and things like that. And, and the nuances there. But, again, we go back to we are a strategic company. The PAC is a strategic tool as part of the government relations team, and to ignore a large portion of Congress and disqualify them is probably not strategic. And so, yes, we have to take all of these things into consideration. We have to put things on the scale and balance things out. But again, we’re, we are trying to find affirming ways to qualify people rather than negative ways to disqualify people.

Claire McDonough (23:18):

Interesting. and do you what, talk about a little bit about the transparency outside of just your employee resource group in terms of sharing with all of your contributors about your disbursements and your disbursement criteria.

Michael Kennedy (23:38):

Yeah, and, and you know, that doesn’t go you know, wide to the general public, mostly because of FEC requirements is that you know, a lot of these things have to be, you have to be PAC qualified in order to kind of see a lot of the things that we put on our PAC website. But knowing that donations and disbursements eventually are filed and, and, and become public, we are pretty open about that. And we try to publish the reasons and the qualifications that we use for these. And so you know, my terrific team here in US Federal thinks through those issues very carefully and tries to say, Okay, these are the reasons why we’re supporting these members. And, again, when it comes back to these new board members who are vocal and who have a platform and can you know, whip up employee sentiment pretty quickly, we, we pre-socialize a lot of these discussions and saying, Hey, listen, you know, here are two members of the 147 that we’re planning on giving to this cycle.

Michael Kennedy (24:48):

Here are the reasons why and, you know, let me know if, when we get into the board meeting if you’re gonna have a problem with it. Cause I’d love to discuss that beforehand and resolve any questions or concerns you might have. And so it’s allowed us to do the work that we need to do to pre-socialize these things, but it also enables us then to have many more points of contact with our pod leaders and, and to be able to you know, have, have better relationships across the board, which is, I view as a positive.

Claire McDonough (25:23):

How long did it take you to put together the new structure and between changing, adding some new things to your criteria, and getting the approvals to add the pod representation? I’m thinking, you know, I think we’ve all learned over the last two years, there are so many things that will happen that you have no expectation that you’re gonna have to manage. And I think everybody’s learned a lot of adaptability and a lot of survival skills from that. But how is what we’ve all gone through the last two years and the emergence of the pods and the employee resource groups help prepare you for future challenges that are inevitably coming down the pike and you just don’t know when they will?

Michael Kennedy (26:05):

Yeah, I think, you know, to answer the first part of your question, I think conceptually it was very easy to get support for this. Thinking through, you know, I know that some people have not added ERGs directly to their boards. They’ve created separate kinds of advisory panels and, you know, there are reasons to do that and maybe practical reasons and just kind of expediency reasons for how board meetings go and, and the decision process goes for different people’s bylaws. For us, it was pretty simple to say, okay, you know I think in the aftermath of, of Black Lives Matter and things like that, there was just such a will, a desire to make an impact and to show that we’re listening and that there is, that VMware cares about these communities and that we want to have, you know, this not just be talk but we wanna walk the talk.

Michael Kennedy (27:03):

So conceptually it was pretty easy to say, Hey, listen, this is what I proposed. This is what I think we should do. The practicality of then kind of going to the pod leaders and saying, Okay, there’s this public election committee, and here’s what it is, here’s what it isn’t. You know, would you be interested in joining the board? And there, you know, some people were very enthusiastic and wanted to jump in. Some people were pretty skeptical and had to be convinced. So, you know, I think the devil was always in the details on some of these things, but we, we were able to move pretty quickly cuz our CEO was engaged and there was a lot of support across the company for actually taking action at that time. I think in the future planning and future engagement and things that will pop up in kind of the ESG world and the inevitability for what all government relations functions are now dealing with I think it’s prepared us in the sense that we now have relationships with these leaders.

Michael Kennedy (28:01):

And so instead of, you know, the black pod leader contacting somebody, contacting the CEO, it’s our friend Latrice who’s contacting the CEO. And so I can now call Latrice and say, Hey you know, I, I’d love to hear your thoughts on this, and we have a relationship and we know each other and there’s just kind of a foundation of trust that we can then work on solutions for. And so, again, for me, there have been, you know, very little downside to this inclusion within our PAC structure. And, and I think it has been a, a win win win across the board.

Claire McDonough (28:40):

I’m interested in some of the conferences and other things where I’ve seen  this conversation happening. How has the emergence of the pods and employee resource groups, and you’re including them on your PAC board, impacted other divisions within your organization, say your communications team or other things, do other people look at this and say, now, oh, this is a really interesting thing about looking and getting the perspectives and the input from these groups in terms of our communications and other things? Is this replicable? How are other people on your peers looking at this structure that you have in place?

Michael Kennedy (29:26):

Yeah, and people may disagree with me on this but my feeling is that government affairs is turning more into corporate affairs mm-hmm. <Affirmative> and that we can’t either. So some of those stakeholders you’ve mentioned, we can’t operate in vacuums or in silos, to deal with these things. And that talking to stakeholders, whether internal or external requires coordination between HR and communications and the ESG office and the office of the CEO and all those kinds of things. And so it ends up being much more of a coordinated corporate affairs function, even though we don’t have an official corporate affairs function, right? Mm-Hmm. But it, but we kind of act that way. I think this has enabled that, it was easy for us because our chief comms officer other people were already on the PAC board, and so they knew where we were going with that, and it was just easy for us to coordinate that, but it becomes much more tightly integrated and allows us, again, the familiarity and the trust to, to deal with other issues as they arise.

Claire McDonough (30:40):

What we, oh, let’s talk about our polls. So it looks like currently, a hundred percent responded, and I can’t see how many people replied, but a hundred percent say they have resumed contributions to the 147. So that is interesting. And it’s a 50-50 split between folks who have employee resource group representation on their backboards. There’s still time to take those. So lets you ready to open it up for Q and A. Ready for some questions?

Michael Kennedy (31:13):

Absolutely.

Claire McDonough (31:15):

All right. Folks, please go to the Q and A box and send some questions our way.

Michael Kennedy (31:22):

It looks like there was a question in the chat about feedback from consumers and customers about our donation strategy. If VMware is, is not a super consumer-facing company, and it’s kind of the one instance where being the biggest company, no one’s ever heard of, maybe an advantage in that we don’t, you know, no one gets famous off of our brand and, and beating up our brand or boycotting our brand, I would say we are careful, of course, about what our customers think we are. We listen to them, we listen to people who use us and, and our products, and we care deeply about that. But we don’t get a lot of feedback there. You know, sometimes we hear from people saying, you know, why did this member, why that member and specific individuals? And we generally try to avoid getting into, you know, individual conversations about individuals. And sometimes I’ll call if it’s an employee or something that I’ll call up and have a chat about, you know, what the PAC does and what the PAC doesn’t. And that, you know, the team has a strategy over, you know, the four, four pillars that we use. But you know, I’m probably not the best person to answer that question just because we’re not a consumer brand.

Claire McDonough (32:50):

Do you have, what kind of listening posts do you have to track or hear what people are saying about your politics out in the, on the internet or on Twitter? Or is it just really not a problem for all the reasons you stated before?

Michael Kennedy (33:05):

Listen, we track all of them, and our comms team tracks it all. And, even our internal Slack channels and, you know, we look for hotspots and all these kinds of things. And, again, what I would say is the risk is, is that, you know, our strategy is not one of ideological purity, right? Mm-Hmm. <affirmative>. And I think if there are members of employee resource groups or other employees who want ideological purity, it’s just difficult to deliver that. Maybe you can deliver it for a pocket of the company, but there, you know, inevitably another pocket of the company will not like what you’re delivering. And so we try to be, again, as strategic as possible and to cover as many areas as we can as part of our strategy.

Claire McDonough (34:00):

Wow. We’re waiting hopefully for more questions. I’m gonna ask you the question from the icebreaker. What was your favorite PAC trip and why you ever went on?

Michael Kennedy (34:09):

Oh, gosh.

Claire McDonough (34:10):

Or hosted for that reason, potentially.

Michael Kennedy (34:15):

I’m gonna take the easy out on this, and I’m just gonna say that our, these ERG-related fundraisers that we’ve hosted mm-hmm. <Affirmative> have actually been really, really fun. And they just, they’re just different. And it’s a different conversation. The member shows differently, and you see I mean, like we had when one of the women’s events we did, the member and some of our pod leaders were kind of crying together about shared experiences and why they got into politics and, and it’s just a different situation to have non-GR people sitting around the table having a conversation about things that are naturally, naturally passionate about. And what I would say is I would be delighted for others to join us in these fundraisers. So if people are interested feel free to reach out to me.

Michael Kennedy (35:10):

My email is mkennedy@VMware. And I would, I’d be delighted to include people. And, you know, from the beginning, we knew that our PAC wasn’t that big, and we always thought that this would outgrow us in a certain sense, and that there would be other companies that would say, Hey, I wanna do a similar event for this member, and maybe VMware doesn’t have the budget for that member, but if there are other people willing to do this and carry this on you know, I just, I think it’s a good thing for Washington. I think it’s a good thing for corporate America, and it’s a positive that can be affiliated with PS that in, in today’s environment, it is not a positive generally, you know, people super PACs have kind of ruined some of that, I think as well. But I think we viewed, you know, corporate PACs and there’s ac academia around this that they’re moderating, moderating influence and they’re an important part of kind of the political discussion.

Claire McDonough (36:13):

Oh, we have a question, and this is one that I have, I spent a lot of time personally working on for our clients over the pandemic. Have you considered letting donors designate which politicians they want to contribute to and sort of doing designations, designated giving?

Michael Kennedy (36:31):

The answer is yes, we have considered that. And, and that actually has some roots in VMware’s giving strategy in general. Our foundation uses something that we call citizen philanthropy, where our foundation doesn’t just give, you know, 2 million from VMware to, you know, Girls Who Code or something like that. We distribute dollars to every employee who has a certain amount every year to give to whatever not for profit that they see fit. And they kind of view it as, you know a million drops of rain equal to a waterfall and things like that. And that, you know, there will be ebbs and flows, and sometimes they get encouraged to, you know, here are some you know, Black Lives Matter related charities, here are some other, if there’s a natural disaster or something, here are places you can give. But generally, that citizen philanthropy is something that is, is kind of a core thing in the PAC because we’re so small or relatively small.

Michael Kennedy (37:31):

We’ve avoided that because what we’ve seen and when we’ve kind of asked is some people will come and say, well, we should, you know, we should give to Bernie. And we say, Okay, well, you know, Senator Sanders doesn’t take PAC dollars. Well, you know, we should give to him anyway. And so it, you know, it becomes a little bit difficult in that we try to listen of course, but again, we want this to be a strategic tool and something that the government relations team is using as a strategy, and we try to get as much input as possible. But no, we haven’t, we, we haven’t gone that direction yet.

Claire McDonough (38:08):

So I’m not sure if the person who asked this question was asking about specific candidates as opposed to designating. So this is one of the things we’ve worked a lot on with some clients, which is allowing them to designate that their PAC dollars only go to Republican candidates or Democratic candidates as opposed to individuals which has own it’s own special problems as well, to administer.

Michael Kennedy (38:33):

Yeah. Yeah. Listen, I think, think we could do that. And, you know, we’ve, we’ve talked about that. For me, it felt from our end, it felt a little disingenuous because we knew we had a bi, we have a mandate you know, bylaws mandate for bipartisanship and bicameralism. And so if some, if, if they say, Oh, you know, say 90% of our donors say, Okay, well, we want to give to Democrats, then we would probably go to our entire C-suite who generally max out to the PAC and we say, Okay, we need you to designate all of your money to Republicans just so we can have a balance, right? And so it, it felt, you know, that decision on our side felt a little disingenuous. Right now, again, we try to be as close to 50-50 as we can. Right now we trend, trend a little more Democrat in our giving and, and we trend a little more House to our giving as you know, one would expect right now.

Claire McDonough (39:32):

Are there any final questions out there? And if not, I will have any last final words or advice, or ideas that you wanna share with

Michael Kennedy (39:48):

Folks? Listen, I’m delighted that I had this opportunity and, and ability to talk about this if people are interested in helping and improving our process and participating in some of these fundraisers that we do. Again, I’m, I am very interested in hearing ideas and welcome diversity of thought and also participation in some of these things. So please reach out and, and give me ideas. And, again, thank you for the opportunity and thanks to people for tuning in.

Claire McDonough (40:20):

Absolutely. Thank you so much for agreeing to be our Wonk Week presenter. And for all of you again, we will be posting and emailing the sessions and stay tuned and hear more about Quorum PAC, which will be coming to you soon. Thanks so much, Michael.

Michael Kennedy (40:38):

Thank you.

Claire McDonough (40:40):

Happy. See you Wonk Week, 2023. Everybody.