Many of the CEOs and leaders I’ve featured on my blog have ended up here for ignominious reasons: from sexual harassment claims too numerous to mention (Dov Charney) to expletive-laced screaming fits (Peter Arnell) to abusing their power at the head of a literally sacred institution (Mark Driscoll). But lately, a new trend in CEO behavior is giving me hope and proving that belligerence is not the natural reaction to having power. Behold the emergence of the activist CEO: those corporate leaders willing to take a stand on controversial issues in hopes of using their influence for good. Not everyone is on board with CEOs putting their money where their mouths—and hearts—are. Depending on whom you ask, Marc Benioff, CEO of the software company Salesforce—currently valued at around $3 billion—is either a man of principle who uses his influence on behalf of social justice, or a leftist bully who imposes his values on state lawmakers.
He made headlines recently, along with other business heavy hitters such as Microsoft, PayPal, and Deutsche Bank, when he was outspoken in his disgust about North Carolina’s controversial bathroom law—joining the coalition to pressure the state’s governor to repeal the law or risk losing business. This is not his first foray into social activism; he also came out swinging against Indiana’s Religious Freedom Restoration Act and Georgia’s proposed bill to allow discrimination against same-sex couples.
Once upon a time, a large corporation wouldn’t have touched an issue like this with a ten-foot pole. But now, many feel that being outspoken about social issues is a savvy move and something that’s expected of CEOs, particularly those looking to attract top millennial talent. Young workers are often looking for more than just a job when they interview with a company. Those who have their pick of employers factor in everything from parental leave policies to on-campus amenities to the company’s corporate values when choosing where they want to spend their working hours. Benioff is quoted in a recent Wall Street Journal piece as saying, “The next generation of CEOs must advocate for all stakeholders—employees, customers, community, the environment, everybody, not just for shareholders.”
These CEOs’ motivation isn’t purely altruistic of course. A recent study by the New York Times showed that taking an activist role also has a positive impact on a company’s brand sentiment—with those respondents who were told about a company’s discrimination concerns reporting that they were likelier to buy the company’s products.
CEOs affecting public policy is, in and of itself, nothing new. But this activism trend is far different from the long tradition of influencing lawmakers through back channels such as lobbyists and campaign donations. The implications of Citizens United have reached far and wide, with endless campaign ads of questionable veracity running each election cycle (if, in fact, we can ever be said to be not in an election cycle in the modern era). These ads are often sponsored by groups with benign-sounding names (Americans for America, We Love USA PAC) and opaque origins. Lots of money trades hands, but it’s next to impossible to figure out who is giving how much to what cause.
CEO activism is the opposite. In the case of Benioff, he’s taking to his Twitter account to denounce discriminatory laws, making his stance clearly known. This has been true on the other side of the political spectrum as well: many found the anti-marriage-equality sentiments of Chick-fil-A CEO Dan Cathy repugnant, but it’s helpful in a way, that he’d let them be known. That way, those who disagree with him can have all the facts before, say, accepting a corporate sponsorship from the company, or perhaps just stopping in for a chicken sandwich.
This represents something new and dramatic in the role of a CEO, whether it’s a public or privately owned firm, and I’ll dig deeper into the academic research on further consequences of activist CEOs in my next post. What we’ve examined so far is just the tip of a very refreshing iceberg.