CEO Political Activity and CSR: The Impact of the Breadth and Depth of CEO Political Engagement

Abstract

There are two typical nonmarket strategies firms most engage in: corporate political activity (CPA) and corporate social responsibility (CSR). Despite a growing interest in CPA and CSR, the strategic relationship between these two nonmarket strategies is still very unclear. In particular, we know very little about the relationship between a CEO’s political activity and their firm’s CSR practices. This is surprising, as the CEO is one of the most influential people in an organization who makes critical strategic decisions. Unfortunately, CEO political activity has largely been ignored by current scholarship. To demystify this relationship between CEO political activity and their firm’s CSR practices, we examine how and when CEO political activity influences their firm’s CSR practices. We test this relationship through CEO political donations (e.g., lobbying), and find that a CEO’s political activity (CPA) attenuates a firm’s CSR practices; and this negative association is attenuated by the breadth of a CEO’s political activity.