Policymaker Responses to CEO Activism

Abstract

CEOs increasingly engage in activism on controversial social and political issues, such as police reform, LGBTQ rights, and gun control, to influence the behavior of policymakers. We run an experiment on 514 local, elected politicians to examine how CEO activism on police reform affects the views of policymakers. Additionally, we examine how CEOs’ controversial positions on social issues affect politicians’ willingness to privately meet with CEOs or publicly advocate for their businesses. We find that CEO support for specific police reform policies has no effect on policymakers’ opinions. Policymakers, however, are much less willing to engage—either privately or publicly—with CEOs who take controversial positions on social issues. These results do not vary with local economic conditions or the salience of police reform, but appear to be driven by policymakers’ personal, ideological commitments. Our results suggest that CEO activism is a poor tool for influencing local politicians, at least on the topic of police reform, and underscore the business costs of CEOs taking political positions. We discuss the implications for CEOs and the activist groups that often pressure them to take public positions on controversial issues.

Keywords: CEO activism, public policy, non-market strategy, police reform, politician, local politics

JEL Classification: M00, H00