Does CEO Activism Make a Difference? Not so much.

Over the last decade, it seems, corporate leaders have been taking a stand. First, it was executives from companies such as Nike, Citigroup and WarnerMedia issuing statements taking a stand in the wake of George Floyd’s 2020 murder. More recently, CEOs have come out against the repeal of Roe v. Wade and in support of gun control. On the other side, Hobby Lobby and Chik-Fil-A have stood up for conservative Christian values, and of course, X’s Elon Musk has advocated so strongly for Donald Trump’s positions that he’s essentially a member of the president’s new administration.

Does any of this CEO activism actually sway the public in terms of mobilizing to affect policy? According to a study by Young Hou, assistant professor of strategy, ethics and entrepreneurship at the University of Virginia Darden School of Business, and Christopher Poliquin, assistant professor of strategy at the UCLA Anderson School of Business, the answer is: not really.

“CEOs have been talking about these activist issues that have no obvious implications for the operations of their companies,” Hou says. “You might think that people would listen to CEOs and mobilize to affect policies because they trust them more than they would a politician.”

After all, compared to politicians, trust in CEOs is generally high among the general public; and polls show that somewhere between 65% and 86% of people believe CEOs should speak out about social, environmental, and political causes. “Despite that, we find that CEOs do not have this magical power to engage and mobilize people,” Hou says.

In fact, they risk a lot when engaging in activism.

Even in academic literature, there is a debate about why CEOs and other corporate leaders feel compelled to speak out on political and social issues. One view is that they are doing it for “instrumental reasons,” Hou says. “Maybe because they think their employes or investors will like it, so they are gaining something from it.” On the other hand, some believe they are doing it out of ethical reasons and an inherent sense of altruism, in an attempt to influence public policy. “They have a stage to promote something they truly care about, and so they are using their platform as a kind of bully pulpit.”

Regardless of their motivations, it would be deemed a success if CEOs were able to sway public action. In a paper published in the Journal of Business Ethics recently, Hou and Poliquin conducted a number of real-life experiments to see how stances by CEOs affected individual’s level of mobilization on issues. In the wake of the Dobbs decision by the Supreme Court repealing Roe v Wade, they chose the hot-button issue of abortion, presenting the issue to nearly 5,000 individuals in an online experiment. Some were given information about support for abortion rights by CEOs, while others were given information about support by Democratic politicians, “many people,” or no information at all. They then gave participants an opportunity to send an actual letter to their US senator supporting abortion rights.

“We know that people’s opinions are very entrenched, so they are unlikely to change their minds,” Hou explains. “But even if it didn’t change people’s opinions, we wanted to see if it increases their willingness to mobilize.” In other words, the researchers wanted to measure whether people would be more likely to send a letter to their US senator when exposed to the advocacy by a CEO compared to advocacy from a politician or the public as a whole. In fact, they found no difference in the percentage of people who were inspired to click “send” on the letter based on CEO advocacy — nor did it inspire a backlash among those opposed to abortion rights. The only change they found was a slight increase in willingness to send the letter by pro-choice citizens whose senators were also pro-choice, an action unlikely to have much effect on public policy.

The findings suggest that CEOs might overestimate their ability to motivate the public to mobilize and engage in policy on social and political issues.

“It raises the question about why CEOs are speaking out,” Hou say. “A lot of CEOs are suggesting that they are engaging in these topics because they wanted to change policy rather than making more profit. But our results showed that they are not changing people’s opinions, or even motivating people to engage.” At the same time, an earlier paper by Hou and Poliquin shows there is a real risk of backlash by customers.

“While it is challenging to pinpoint the exact motivations driving CEOs to engage in activism — be it instrumental or ethical — a valuable step in understanding this phenomenon is to more closely study how such activism is perceived,” Hou says. This is an area where the co-authors are actively conducting ongoing research.

Young Hou is co-author with Christopher Poliquin of “CEO Activism and Political Mobilization” published in the Journal of Business Ethics.