Research

CEO Activism (Trend Brief)

Feb 08, 2024

What Is CEO Activism?

CEO activism occurs when senior leaders speak out on social issues that are not directly related to their company’s bottom line but may impact corporate reputation as well as public, employee, and other stakeholders’ impressions.1 It can be an element in Corporate Social Responsibility (CSR) and, more recently, Environmental Social Governance (ESG) programs,2 and is generally directly aligned with business goals and strategy. 3

While CEO activism is increasingly common in the United States, there is also pressure on European and global CEOs to take similar action.4

This research examines the unique insights CEOs bring to public conversations, how CEO activism is driven by employee and customer expectations, questions for organizations to consider when taking a stand, and descriptions of selected CEO workplace pledges, including the Catalyst CEO Champions For Change.

CEOs Bring Unique Insights to Public Conversations

There is a growing consensus that business leaders should make a positive impact on the world. 5 According to the 2023 Edelman Trust Barometer, business is the only institution seen as competent and ethical.6

Because of their public standing and power, CEOs are well-positioned to start conversations that can have a real impact on public opinion and lawmakers in their communities. 7 Indeed, both employees and customers often look to workplace leadership and organizational values for guidance on complex and urgent issues that dominate the news cycle, such as racial and ethnic violence, economic insecurity, human rights violations, and the climate crisis.

Corporations and their CEOs have a long history of attempting to influence government policies and legislation on taxation and other issues to affect the marketplace and increase profits. In the US, they have also taken stands on social issues by filing amicus briefs in appellate court cases in which they have a strong interest, for example supporting affirmative action in the 1980s.8 More recently, companies have signed briefs supporting LGBTQ+ employees 9 and the Deferred Action for Childhood Arrivals (DACA) program 10; in the latest challenges to affirmative action, a historic number signed briefs advocating the importance of racial and ethnic diversity in higher education. 11

CEO Activism Is Driven by Both Employee and Customer Expectations

In a 2023 global survey: 12

  • 89% of people said they expected CEOs to take a stand on the treatment of employees.
  • 82% said CEOs should take a stand on climate change.
  • 80% said CEOs should take a stand on discrimination.
  • 84% said CEOs have an obligation to pay a fair wage.
  • 79% said CEOs are obligated to ensure that their home community is safe and thriving.
  • 64% said companies can help society by supporting public figures that build consensus and cooperation.

Employees aren’t the only stakeholders who expect CEOs to take a stand on social issues and ESG investments: Customers and potential employees, particularly younger ones, are watching what leaders do, too.13

Millennial and Gen Z Employees Want CEOs to Lead on Social Issues

A global survey of Millennial and Gen Z employees found that they see business leaders as important voices in the public discourse on social issues. But leaders and companies are falling short, as less than half of respondents believe that organizations have a positive impact on society.14

  • Only 44% of Millennials think organizations have a positive impact on society.
  • 48% of Gen Z think organizations have a positive impact on society; this percentage steadily decreased over the past five years, only leveling this year.

Younger employees are especially concerned about the increasing cost of living, unemployment, and climate change, 14 all of which may influence their choices on where, how, and who they choose to work for. Globally, 69% of people surveyed in 2022 said they might even turn down a job offered by a company that did not make a societal impact. 15

Companies are making upward progress in meeting Millennial and Gen Z employees’ expectations around DEI efforts, but a large majority of these employees are still unsatisfied in this area. 14 As DEI work evolves, leaders can build momentum by getting creative about where they recruit for new talent, as well as enhancing their internal company culture to improve retention. 16 CEOs and businesses can also publicly support campaigns and legislation designed to increase DEI efforts based on facts and metrics instead of negative discourse and inaccuracies.17

CEOs who take a stand on social issues like these give a human face to their company, which can drive attraction and retention as people look for meaning in their day-to-day jobs. 18

The Bottom Line

Today’s leaders are faced with both a moral and a business imperative to act. 19 On many issues, saying nothing may be seen as a tacit endorsement of one perspective. When CEOs are perceived as authentically advocating for social causes, they gain respect as individuals, and their organizations are likely to see an increase in revenue and new customers. 20 Studies have found that CEO activism increases stock prices—even in instances where there was an initial decrease in sales—and rarely negatively affects overall firm value.21

Questions to Consider

Taking a stand may feel bold and must be done thoughtfully. Before leaders and/or organizations claim a position, consider the following questions:

  • Credibility: What is the link between your company’s values and your public activism?22
  • Authenticity: How does your activism connect to your organization’s unique positioning and values? Don’t try to be who you are not.
  • Backlash: While speaking out may increase loyalty and recruitment, how will you address employees and other stakeholders who may feel excluded by the messaging? Remember, you cannot be all things to all people. Lead with your values.23
  • The Risk of Silence: Will not speaking out incur risk in the form of assumed complicity, which can lead to boycotts and a decline in sales?24

CEO Workplace Pledges

  • Catalyst CEO Champions For Change: A group of 80+ CEOs pledging to advance more women into all levels of leadership.
  • CEO Action for Diversity & Inclusion™A CEO-driven business commitment to advance diversity and inclusion in the workplace.
  • CEO Activist:Leaders of some of the UK’s largest organisations who have pledged to use their influence, experience, and respective public platforms to create an industry-wide pledge to ‘Move the DIAL on Diversity’ in UK businesses.
  • Equality Is Our Business Business leaders support LGBTQ+ rights through the Human Rights Campaign.
  • Open to All Public education organizations, elected officials, businesses, and nonprofit service providers pledge not to discriminate against employees or customers based on race or sexual orientation.
  • Alliance of CEO Climate Leaders: An initiative of the World Economic Forum, a CEO-led community committed to raising bold climate ambition and accelerating the net zero transition by setting science-based targets, disclosing emissions, and catalysing decarbonization and partnerships across global value chains.
  • Paradigm for Parity®: An alliance of CEOs, senior executives, founders, board members, and business academics dedicated to achieving “full gender parity by 2030, with a near-term goal of women holding at least 30% of senior roles.”

 

How to cite this product: Costigan, A. & Hughes, V. (2024). CEO activism: Trend brief. Catalyst.

  1. Chatterji, A. & Toffel, M.W. (2017). Assessing the impact of CEO activism. Harvard Business School Technology & Operations Mgt. Unit Working Paper; Brien, D. (2020, November 24). 10 lessons from CEOs on how to manage corporate reputation in a new era of activismFast Company.
  2. Corporate social responsibility: A brief history. Association of Corporate Citizenship Professionals; Schwab, K. (2023, November 30). Facing pushback and government scrutiny, ESG investing may be headed for change. Marketplace.
  3. Chatterji & Toffel (2019).
  4. Vermoesen, K. Will CEO activism become a trend in Europe, too? (Research) FINN; Loughlin, J. (2023, January 29). CEO advocacy – the next step after ESG is to take a stand. Forbes Australia.
  5. Loughlin (2023).
  6. 2023 Edelman trust barometer: Global report.. (2023). Edelman.
  7. Nickish, C. (2018, March 27). Why CEOs are taking a stand[Podcast]. Harvard Business Review. IdeaCast; Aiello, C. (2018, August 17). Social change is part of business, Ben & Jerry’s CEO says. CNBC; Bersin, J. (2018, September 5). Yes, CEOs, you do need to speak on social issues. Forbes.
  8. Chatterji & Toffel(2019).
  9. Fitzsimons, T. (2019, July 2). Over 200 major companies sign Supreme Court brief in favor of LGBTQ workers. NBC News
  10. Bernal, R. (2019, October 4). More than 140 businesses call on Supreme Court to protect DACA.. The Hill.
  11. Historic number of corporations file amicus briefs in U.S. Supreme Court in support of college admissions policies that foster diversity. (2022, August 1). Legal Defense Fund.
  12. 2023 Edelman trust barometer: Global report.(2023). Edelman.
  13. Gassmann, P. & Jackson-Moore, W. (2022, December 6). The CEO’s ESG dilemma. PwC; Winston, A. (2023, April 5). Why business leaders must resist the anti-ESG movement. Harvard Business Review; Post, C. (2022, June 15). Why Republican attacks on CEO activism may not be justified. Forbes.
  14. 2023 Gen Z and millennial survey: Waves of change: Acknowledging progress, confronting setbacks. (2023). Deloitte.
  15. Edelman trust barometer 2022: Special report: Trust in the workplace. (2022). Edelman.
  16. Takeaways from the Catalyst affirmative action webinar: 8 steps companies can take to protect their DEI programs: Infographic. . (2023). Catalyst.
  17. Green, J. (2023, June 15). Employee activism in the age of purpose: Employees (up)rising. Business for Social Responsibility.
  18. Bojanic, V. (2023). The positioning of CEOs as advocates and activists for societal change: Reflecting media, receptive and strategic cornerstones. Journal of Communication Management 27(3), 398-413.
  19. Does the US Supreme Court decision on affirmative action affect your company’s diversity initiatives? . (2023). Catalyst.
  20. Bojanic (2023).; Jin, J., Mitson, R., Qin, Y., Vielledent, M., & Men, L. R. (2023). Enhancing young consumer’s relational and behavioral outcomes: The impact of CEO activism authenticity and value alignment. Public Relations Review, 49(2).
  21. Post(2022).
  22. Chatterji, A. W. & Toffel, M. W. (2018, January/February).The New CEO Activists, Harvard Business Review.
  23. Chatterji & Toffel (2018); Larcker, D. F. & Tayan, B. 2018 CEO activism survey. (2018). Stanford Graduate School of Business and the Rock Center for Corporate Governance.
  24. CEO activism in 2017: High noon in the c-suite. (2017). Weber Shandwick and KRC Research.
Authored by: Amelia Costigan Venessa Hughes