CEO Activism: Do you join the bandwagon or not?

How often do you read the paper in the morning, come across a social issue and want to, so very badly, write a letter to the editor explaining your viewpoint and justifying it to the last discrepancy? It’s a feeling that most of you reading this will know on some level and some of you may have even done it. But how do you feel about doing it when your name is publicly tied to your business? Do you feel the same way? Do you have that same passion in wanting your voice to be heard? For a lot of CEO’s, it turns out the answer is yes. The question is – are you one of them?

Harvard Business School professor Mike Toffel and his coauthor Aaron Chatterji, have identified this phenomenon and labelled it “CEO Activism”. Corporate executives are increasingly speaking out about social and environmental issues not related to their business activities and it is doing interesting things.

Firstly, it is influencing public opinion on an issue – when the ‘public’ already has a positive affinity for the executive or company. The professors conducted a study on public support for a law in Indiana that allowed businesses to discriminate against gay and lesbian customers as a matter of religious freedom. They were surveyed and 50% of the respondents said they supported it. However, this decreased to just 40% when they were informed that Apple CEO Tim Cook opposed it. Interestingly, they both preceded and followed these questions up with a question about interest in Apple products. It rose on a five-point scale from 2.7 to 3.02.

That leads us into the second point, that yes – CEO Activism can influence public perception of a business. In a study carried out by Global Strategy Group it was revealed that 26 to 30 year olds are 20% more likely to purchase from companies whose social political stance mirrors their own. Conversely, when a company does not share the same social political stance as someone in the 56 or older age group, they are 16.2% less likely to purchase from the company.

That information really leaves us with one question for CEOs – with that kind of impact, is CEO Activism something you really want to dabble in?

Ask yourself these questions and you should develop a clear idea…

Reflect on your customer – are your values and opinions likely to be aligned?

If yes, then it could have a very positive impact. If no, it could be detrimental to business and its time to start searching for a new market.

Consider your corporate values – does your opinion support and reflect these?

If yes, that’s great because people cannot accuse of hypocrisy. If no, then perhaps your company is not a vehicle to share personal opinions.

Ask yourself why – why do you want to share your opinion?

If it’s to make a change, difference or impact, then you have the right motive. If it’s because it’s popular and you want to squeeze that extra brand loyalty out of your customers who share the same stance, don’t do it. It’s a recipe for disaster and while it may work once or twice, three times the charm is just unheard of when it comes to non-genuine activism.

So there you have it, if those were positive answers, then follow in the footsteps of Qantas CEO Alan Joyce, Apple CEO Tim Cook, PayPal CEO Dan Schulman and H&M CEO Karl Johan Persson. Voice your opinions and see what power your brand can conjure. But if they were negative answers, then leave it to the big guys.


How do you feel about CEO Activism? Do you think there’s a place for it in the Australian business landscape?