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Should CEO speak about society issues? Well, well, we have a surprise in America

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Staff Writer | November 26, 2018
In summer and fall 2018, the Rock Center for Corporate Governance at Stanford University conducted a nationwide survey of 3,544 individuals to understand how the American public views CEOs who take public positions on environmental, social, and political issues.
CEO speech
America   While some applaud CEOs who speak up, others strongly disapprove
“We find that the public is highly divided about CEOs who take vocal positions on social, environmental, or political issues,” says Professor David F. Larcker, Stanford Graduate School of Business.

“While some applaud CEOs who speak up, others strongly disapprove. The divergence in opinions is striking.

"CEOs who take public positions on specific issues might build loyalty with their employees or customers, but these same positions can inadvertently alienate important segments of those populations. The cost of CEO activism might be higher than many CEOs, companies, or boards realize.”

“Hot-button issues are hot for a reason,” adds Brian Tayan, researcher at Stanford Graduate School of Business.

“Interestingly, people are much more likely to think of products they have stopped using than products they have started using because of a position the CEO took on a public issue. When consumers don’t like what they hear, they react the best way they know how to: by closing their wallets.”

While two-thirds (65 percent) of the public believe that the CEOs of large companies should use their position and potential influence to advocate on behalf of social, environmental, or political issues they care about personally, one-third (35 percent) do not.

Opinions starkly differ depending on the political affiliation of the respondent. Nearly three-quarters (72 percent) of respondents who self-identify as Democrats support CEO activism, while just over half (57 percent) of Republicans do.

Opinions vary more significantly depending on the age of the respondent. A large majority of Millennials (71 percent) and two-thirds of Generation X (63 percent) support CEO activism.

Baby Boomers, by contrast, are more likely to disapprove of CEO activism, with only 46 percent approving and 54 percent disapproving.

All respondents are more in favor of CEOs taking public positions on social, environmental, or political issues if those issues directly impact their business or employees.

Seventy-two percent of the public support CEO activism under these circumstances, with Millennials (76 percent), Gen X (71 percent), and Baby Boomers (60 percent) holding favorable opinions.

The public reaction is somewhat more mixed about issues of diversity and equality. Fifty-four percent of Americans support CEO activism about racial issues, while 29 percent do not; 43 percent support activism about LGBTQ rights, while 32 percent do not; and only 40 percent support activism about gender issues, while 37 percent do not.