CEO activism, the growing trend of top executives speaking out on sensitive social and political issues, has been labeled the “new normal.” But behind the scenes, executives do not feel in control. They are struggling to anticipate and respond to intensifying pressure from the public, investors, and — above all — their employees.
When CEOs Should Speak Up on Polarizing Issues
CEO activism, the growing trend of top executives speaking out on sensitive social and political issues, has been labeled the “new normal.” But when should CEOs speak out on a social issue? In some cases, taking a stand can be just as detrimental to the company’s bottom line as saying nothing — and vice versa. The author’s company, nonprofit sustainability consultancy, studied how different stakeholder groups perceive its clients. What it learned: Companies must consider values, not just shared value. Employees have become a company’s most powerful interest group. The polarization of an issue heightens the risk of speaking out. A CEO’s rhetoric must be aligned with the company’s dollars. And, whatever a CEO may say in public, the opportunities for a company to take direct action can be limited.