The Double-Edged Sword of CEO Activism

13 Pages Posted: 13 Nov 2018

See all articles by David F. Larcker

David F. Larcker

Stanford Graduate School of Business; Stanford University - Hoover Institution; European Corporate Governance Institute (ECGI)

Stephen Miles

The Miles Group (TMG)

Brian Tayan

Stanford University - Graduate School of Business

Kim Wright-Violich


Date Written: November 8, 2018


CEO activism — the practice of CEOs taking public positions on environmental, social, and political issues not directly related to their business — has become a hotly debated topic in corporate governance. To better understand the implications of CEO activism, we examine its prevalence, the range of advocacy positions taken by CEOs, and the public’s reaction to activism. We ask:

• How widespread is CEO activism?

• How well do boards understand the advocacy positions of their CEOs? • Are boards involved in decisions to take public stances on controversial issues, or do they leave these to the discretion of the CEO?

• How should boards measure the costs and benefits of CEO activism?

• How accurately can internal and external constituents distinguish between positions taken proactively and reactively by a CEO?

Note: The Stanford Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance and executive leadership. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important. Larcker and Tayan are co-authors of the books Corporate Governance Matters and A Real Look at Real World Corporate Governance.

Keywords: corporate governance, activism, CEO activism, corporate activism, advocacy, corporate advocacy, corporate social responsibility, ESG, ESG investing, social issues, environmental issues, controversy, corporate reputation, reputation management, boards of directors, risk management, corporate governan

JEL Classification: G30, G34, M12

Suggested Citation

Larcker, David F. and Miles, Stephen and Tayan, Brian and Wright-Violich, Kim, The Double-Edged Sword of CEO Activism (November 8, 2018). Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance No. CGRP-74, Stanford University Graduate School of Business Research Paper No. 19-5, Available at SSRN:

David F. Larcker (Contact Author)

Stanford Graduate School of Business ( email )

Graduate School of Business
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Stanford University - Hoover Institution ( email )

Stanford, CA 94305
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
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Stephen Miles

The Miles Group (TMG) ( email )

630 Fifth Avenue Suite 3210
New York, NY 10111


Brian Tayan

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Kim Wright-Violich

Tideline ( email )

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