Hootsuite’s situation illustrates this vividly. A contract valued at up to US$2.8 million to provide social media management tools and support services through a U.S. federal contractor has sparked protests outside the company’s Vancouver offices, with demonstrators urging the firm to sever ties with ICE and related agencies.

Hootsuite’s CEO insists that the services provided do not include surveillance or tracking, and that the platform “makes public conversations visible at scale,” not targeting individuals. That reassurance failed to quell critics. The reputational risk is palpable — extending far beyond Vancouver street corners and into the boardroom and shareholder registries.

What is striking is the pattern. Pattison Developments became aware of who the ultimate user of its Virginia facility would be — the U.S. Department of Homeland Security for ICE processing operations — only after the sale was announced. The public backlash was swift. Within days, Pattison announced the sale would not proceed.

That raises uncomfortable questions about due diligence. Boards should be asking:

• Did management fully understand the end use of the asset before accepting an offer?
• Were there adequate reputational risk assessments and stakeholder impact analyses?
• Were material risks disclosed to shareholders and other key stakeholders?

In a world hyper‑attuned to social justice, human‑rights concerns and corporate complicity narratives, such lapses are no longer minor operational hiccups. They are strategic missteps.

Critics of Hootsuite and Pattison point out that doing business with entities like ICE — especially against the backdrop of contentious immigration enforcement actions in the U.S. — can appear tone‑deaf at best, ethically compromised at worst. Companies that fail to anticipate these dynamics expose themselves to protests, negative media coverage and even potential disruption in sales cycles.

Investors and pension funds increasingly embed ESG screens into their portfolios. Controversies like these, even if the financial impact of the specific contracts is relatively small, reflect poorly on a firm’s governance quality. It sends signals about risk appetite, stakeholder engagement and strategic priorities.

For management, the lesson is stark: ESG considerations must be integrated into risk management, not treated as peripheral.

Board directors should be demanding answers and safeguards on several fronts:

1. Clear policies on controversial clients and sectors.

If a company is going to engage with sensitive government contracts, it should have a transparent policy that has been vetted legally and ethically.

2. Proper reputational risk modelling.

It is no longer sufficient to analyze legal risk alone. Reputational effects can have measurable financial impact, from churn in customer base to talent attraction problems.

3. Stakeholder communications strategies.

Proactive disclosure, not reactive responses, helps manage narratives before they spiral into full‑blown crises.

4. ESG oversight at the governance level.

Boards should verify that executive compensation, KPIs, and strategic planning incorporate meaningful ESG metrics.

The Hootsuite and Pattison stories are more than isolated headlines. They illustrate a broader shift in expectations: that Canadian firms must navigate not just markets, but morals — and that failure to do so can quickly evolve from street‑level protest to material corporate risk.

Boards, executives and legal counsel ignore this at their peril. Shareholders are watching. Media are watching. The market is watching. And, in 2026, reputation is a quantifiable asset — or, in some cases, a liability — that cannot be ignored.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario and Alberta, and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada.