CEOs are increasingly stepping into the limelight, not as business leaders but as activists. From advocating for LGBTQ+ rights to speaking out on gun control and police use-of-force, CEOs now engage on many polarizing social and political issues. Scholars have examined how this CEO activism affects the behavior of consumers, investors, employees, and other stakeholders. But what is its impact on policymaking?

In our new working paper, we conduct two experiments on 500 elected officials from across the U.S. to examine whether policymakers are moved by CEO stances on contentious issues. In the first experiment, we asked the officials about their support for police reform after randomly exposing half the sample to a Business Roundtable message advocating for the reforms. In the second experiment, we measured their’ willingness to engage with a CEO who was considering relocating to their community, and we varied whether the CEO was described as publicly expressing views on social issues that clash with those of the officials’ constituents.

CEO advocacy for police reform ineffective: Exposure to the CEO message supporting police reform didn’t sway the opinions of local elected officials. While support for police reform was highest among Democrats and lowest among Republicans, members of neither party reported higher levels of support after seeing the Business Roundtable statement. Furthermore, this pattern held regardless of a community’s exposure to police shootings, Black resident share, or history with Black Lives Matter protests or the self-reported views of the community’s policmakers on police-community relations in their area.

Lower willingness to engage with activist CEOs: Strikingly, local policymakers are reluctant to engage with CEOs who speak out on social issues. Policymakers who were told a CEO expressed controversial opinions were less willing to meet privately with the CEO and less willing to publicly advocate for the relocation of the CEO’s company.

When asked an open-ended question about which issues would be problematic for a CEO to speak about, policymakers reported a range of topics, but “small-town values,” diversity, and LGBTQ+ issues led the pack and were cited in more than 20 percent of responses. The range of potentially risky issues for CEO activism covers the gamut of everyday political debate.

Our findings have several implications for business leaders:

• Although CEOs may be influential when it comes to business matters, their persuasive powers on controversial social and political issues may be limited. CEOs looking to influence policy should be circumspect and ask themselves why they are likely to be effective, especially if the issue already has vocal advocates.
• Companies whose CEOs express political opinions risk backlash from local politicians, as Disney recently learned when the Florida legislature retaliated against  CEO Bob Chapek’s opposition to the state’s “Parental Rights in Education” law. Our findings suggest this taste for punishing companies with politicly active CEOs is not confined to a few high-profile incidents  but represents a general wariness on the part of politicians to engage with activist CEOs.

CEO activism has become a significant feature of public debates on a range of divisive issues. Our study suggests that we should not take CEOs’ effectiveness in swaying policymakers and public opinion for granted. Just because CEOs are speaking up doesn’t mean they’re effective at it, and the costs to their companies could be substantial. As CEOs navigate this new role, understanding the potential impact and limitations of their advocacy is crucial for effective and responsible leadership. 

This post comes to us from Christopher Poliquin at the UCLA Anderson School of Management and Young Hou at the University of Virginia’s Darden School of Business. It is based on their recent article, “Policymaker Responses to CEO Activism” available here.