CEOs' public communications are considered essential parts of their stakeholder management efforts. Specifically, CEOs' oral and written communications pertaining to their firms' actions receive scrutiny from external stakeholders (e.g. investors, stock analysts, regulators) and members of the media (Conaway & Wardrope, 2010; Kassel, 2017). There is a burgeoning body of research on CEO communication. Research evidence, for instance, points to the extent to which CEOs' communications influence firm performance and investor behavior (Whittington, Yakis-Douglas, Ahn, 2016; Elliott, Grant & Hodge, 2018). Furthermore, CEOs' communications have been shown to shape firm reputation and stakeholder perceptions in times of crises (Seeger, Sellnow & Ulmer, 2003). In recent years, there have been reports of a growing number of CEOs publicly "weighing in" on controversial public policy debates (Chatterji & Toffel, 2016; Soergel, 2016). These CEOs are addressing a wide range of societal "hot button" issues in the political arena. This trend is considered unusual because it goes against the implicit societal expectation that CEOs refrain from being involved in controversial political debates and instead focus on managing their businesses. We refer to this growing trend as CEO political outspokenness and define it as CEO's public and opinionated expression of personal beliefs and values on controversial political issues. Because this trend is very nascent, scholarly research has not examined the consequences of controversial political comments made by CEOs on firm performance. In exploring this issue, we consider two important contingency factors that moderate the impact of CEO political outspokenness on firm performance: firm 's past reputation ("Celebrity" Status) and history of consumer activism. In the next section, we first provide an overview of CEO political outspokenness. We will then present our study's predictions and conclude by highlighting the scholarly and managerial implications of our empirical findings.
Acharya, K., Abebe, M. A., & Kroll, M. (2019). The Influence of CEO Political Outspokenness on Stock Market Reaction and Firm Performance. Academy of Management Proceedings, 2019(1), 13959. https://doi.org/10.5465/AMBPP.2019.25
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Academy of Management Proceedings