Executive and Organizational Determinants of CEO Sociopolitical Activism

Abstract

The recent rise of CEO sociopolitical activism---CEOs’ public expression of opinion on controversial sociopolitical issues of the day---is attracting scholarly attention as researchers seek to understand the phenomenon and its implications for strategic choices and firm performance. CEO sociopolitical activism can be a ‘double-edged sword’; while it may garner the praises of increasingly vocal stakeholders (e.g., employees, customers, investors), it could potentially backfire by alienating others, especially if the CEO’s position on these issues is inconsistent with these stakeholders. Despite the inherent risk, CEO sociopolitical activism is on the rise. This begs the question: why do some CEOs become sociopolitical activists while others remain on the ‘sidelines’? This study seeks to address this question by exploring the executive and organizational determinants of CEO sociopolitical activism. Drawing from the status and reputation literatures, we explore the effect of CEO power, CEO celebrity status, firm reputation, and firm political activity as predictors of CEO sociopolitical activism. In doing so, we focus on the “bully pulpit” explanation by arguing that high status CEOs are more likely to use their professional position and visibility to advocate for or against controversial sociopolitical issues. Our analysis of data from 178 matched pair S&P 500 firms from 2008-2017 provides support for our predictions. Implications for research and practice are discussed.