Antecedents and consequences of CEO activism

Recent years have witnessed a growing number of CEOs taking public stances on contested socio-political issues such as climate change, LGBTQ+ rights, or immigration, a phenomenon that is termed ‘CEO activism’. This doctoral thesis provides a comprehensive review of the existing literature on this phenomenon, showcasing that there has been much interest in understanding the antecedents and consequences of CEO activism.

This thesis furthermore contains three empirical studies that advance this understanding. In terms of the antecedents of CEO activism, the first study contributes to knowledge by ascertaining the role of CEOs’ political ideology as an important driver of their activism. In line with prior theory, the results suggest that the more a CEO espouses a liberal political ideology, the more they engage in liberal CEO activism. However, many CEOs seem to remain silent on socio-political debates even though current theory suggests that the strength of their political ideology should incite them to engage in CEO activism. This first study develops and tests theory proposing that differences in the vigilance of corporate boards can explain why this is the case. In this research, vigilant boards are considered to be effective in terms of monitoring and disciplining the executive function. However, against the backdrop of CEO activism being a novel phenomenon whose consequences are yet to be fully understood, it is suggested that boards today lack the expertise and experience to guide CEOs to consistently create firm benefits when engaging in CEO activism. Following this, it is proposed that vigilant boards may err on the side of caution and prefer their CEOs to refrain from speaking out on socio-political debates. The findings support this theory and show that board vigilance mitigates CEOs’ inclination to engage in liberal CEO activism.

Next, the second study presented in this thesis advances the current understanding of the antecedents of CEO activism by theoretically and empirically establishing the important role that CEOs’ gender plays for their activism. For one, this research provides a detailed account of not only the various factors that may lead to female CEOs having a greater tendency to engage in liberal CEO activism than male CEOs, but also considers a prominent factor that may prevent them from turning this predisposition into action. More specifically, while female CEOs may have a higher predisposition to advocate for the rights of others, due to e.g., their universal concern and other-orientation, they may be hesitant to speak out as a result of their generally greater risk-aversion. To reconcile these opposing notions, this research is the first to consider the coalition size of CEO activism, i.e., whether CEOs engage on their own or as part of a group, in the theorization on what drives CEOs to engage in activism. The findings show that female CEOs are more collective, but less solo activist than male CEOs, suggesting that engaging in collective CEO activism is a way for female CEOs to reduce their risk-associated inhibitions of engaging in activism. This research further advances current knowledge by testing the moderating effects of CEO celebrity, state conservatism and industry dynamism, variables that are thought to affect a CEO’s perception of or openness to risk. For example, the results suggest that CEO celebrity moderates the relationship between CEO gender and CEO collective activism such that female CEOs with higher celebrity status are more collective activist. By contrast, male CEOs’ propensity to engage in collective activism does not seem to be contingent on their level of celebrity to the same extent.

The third study contained in this thesis advances current knowledge on the consequences of CEO activism. Previous research has primarily focused on the stakeholder reactions that CEO activism elicits. Because of this, little is known about the effect that such activism has on firms and their conduct. To address this gap, the third study examines the effect that liberal CEO activism has on the important business practice of CSR. It is proposed that liberal CEO activism leads to advances in firm CSR in part because both presume a similar value system by the CEO, and because CEOs aim for their activism to be perceived as authentic, genuine and consistent in order to evoke positive stakeholder responses, which may be achieved by substantiating their activism statements with action such as CSR. The findings provide support for this prediction, suggesting that activist CEOs ‘walk the talk’. This research further advances current knowledge by proposing and testing relevant boundary conditions of this relationship. For example, because minority CEOs receive greater scrutiny than non-minority CEOs, they are expected to be more inclined to underpin their activism with substantive action such as CSR than non-minority CEOs. In line with the theorizing, the findings suggest that the main relationship is augmented for CEOs with intersecting marginalized identities who face more scrutiny than CEOs without intersecting marginalized identities. Interestingly, the findings do not lend support for the proposition that the main relationship is augmented for female or racial minority CEOs.

Finally, this doctoral thesis concludes with an overarching discussion that connects the theoretical and practical implications and contributions of the three empirical studies.