Understanding CEO Activism

CEO activism—which is the growing phenomenon of CEOs taking public stances on societal debates such as climate change, racial justice, LGBTQ+ rights, and immigration policies—is a manifestation of a substantial shift in corporate culture and leadership. Unlike traditional corporate social responsibility (CSR) efforts, which generally focus on universally accepted values CEO activism ventures into polarizing topics that can divide public opinion. Furthermore, the deliberately public nature of CEO activism sets it apart from other, more discreet, forms of political engagements, such as lobbying and political donations. In our paper, we provide a systematic overview of studies on CEO activism, and we shed light on the determinants, implications, and future directions of CEO activism.

Why have corporate CEOs recently begun making public statements on contentious social issues? Part of the answer lies in the growing expectations of stakeholders— consumers, employees, and investors—who increasingly demand that corporate leaders take a stand on topics that matter to them. Social media has amplified this trend of linking consumption, employment, and investment choices to social values. It has also provided CEOs with platforms to directly address a wide audience and cater to public sentiments. Academic studies suggest that while some CEOs may speak up because of deeply held personal beliefs, other CEOs engage in activism in response to strategic pressures from stakeholders. Whether personal or strategic motives dominate the decision to engage in CEO activism remains an area of open discussion.

Do companies benefit when their CEOs engage in CEO activism? On the one hand, CEO activism could potentially yield tangible benefits. For instance, employees may respond positively when their leaders take stances that are aligned with their values, leading to higher job satisfaction, lower turnover, and improved productivity. Activism may also attract ideologically aligned talent, which can drive innovation and strengthen organizational culture. Similarly, customers may be more likely to engage with value-aligned companies, enhancing loyalty and willingness to pay a premium for products or services. Furthermore, investors who prioritize environmental, social, and governance (ESG) factors, such as ethical investment funds, may also be attracted to firms with activist CEOs. On the other hand, CEO activism may also be detrimental for businesses. For instance, public stances by CEOs on polarizing issues can alienate stakeholders with opposing views, potentially triggering backlash, boycotts, or loss of investor confidence. Stakeholders may also perceive activism negatively if they believe that CEOs should not act as social/political advocates, regardless of whether the CEOs’ public stances align with their views or not.

Academic studies document mixed reactions to CEO activism from various groups of stakeholders, highlighting the importance of context. For instance, firms that engage in activism that is aligned with their brand and stakeholder values often see positive investor reactions, while misaligned activism can lead to negative market reactions. Similarly, employees respond positively to CEO activism only when it is aligned with their values. Consumers’ responses to CEO activism are more mixed, as some studies show a lack of a positive response even from ideologically aligned consumers. We note, however, that it is hard to draw any causal inferences, as confounding factors may obscure the true effects of CEO activism on firm value and stakeholders’ responses. More research is needed to overcome these challenges.

As new social, environmental, and political dynamics emerge, the role of CEOs as public advocates will continue to evolve. For instance, DEI (diversity, equity, and inclusion) initiatives, once widely celebrated, are now facing resistance in some settings, with companies such as Disney and Bud Light having experienced severe backlash due to their DEI-related social stances and business decisions. Recently, several U.S. corporations, like Walmart and Boeing, have retreated from their commitments to DEI initiatives, and other companies are following suit. In addition, many corporate stakeholders are becoming increasingly sophisticated in distinguishing between authentic and opportunistic behaviours. This evolving landscape poses critical questions for business leaders and researchers: What are the long-term consequences of activism for corporate reputation and performance? How should CEOs balance the conflicting views of their different stakeholder groups? How will the willingness of business leaders to take activist stances change as purchasing power and labour supply transition to younger generations? How will CEO activism affect long-term social and political polarization? Future research is needed to address these questions.

Ultimately, CEO activism is a prelude to the changing role of corporations in our society. In a world where businesses are increasingly being held accountable for their social and environmental impacts, the voices of CEOs have the potential to shape not only their companies but also the broader societal landscape. Whether this influence is wielded responsibly and effectively will define the legacy of today’s corporate leaders.

Swarnodeep Homroy is Associate Professor at University of Groningen and University of Southampton.

Anahit Mkrtchyan is Associate Professor at Isenberg School of Management,
University of Massachusetts Amherst.

Jason Sandvik is Assistant Professor at Eller College of Management, University of Arizona.