How CEO Activism is Becoming the Ultimate Force for Social Change

In the current social climate, the best leaders are those that can create change and opportunity within the walls of their business, as well as outside them.

This is the age of the entrepreneurial activist. We’ve talked about that before. Several times, in fact. And now a major report, published in Harvard Business Review, has revealed the extent to which the phenomenon is spreading.

Aaron K. Chatterji and Michael W. Toffel are teachers at the Harvard Business School. Over the last three years, they have been studying CEO activism – its origins, its impact, and the tactics being used by those speaking up.

What they have discovered, as more and more leaders join the cause before their eyes, is that businesses are realising the pronouncement of their values needs to extend beyond company handbooks. Sometimes for the sake of profit, though mostly due to personal belief, these leaders are galvanising against social injustice and political inaction to use their power and influence to inspire discussion and progress.

The full report has been written as a handbook for leaders who want to learn how to approach social activism from those who are engaging in it already. It’s a great piece, and I encourage you to read it in full. That said, if you’re a member of The 8 Percent, you are likely already involved. For you, we have broken down three of Chatterji and Toffel’s most interesting findings.

Silence Hurts

As the CEO activist trend grows, those who remain silent on unpopular or unethical topics are finding themselves in just as precarious a position as companies that defend their decision to take what is considered to be the wrong side.

Such silence implies approval, as was the case when CEOs begun resigning from Trump’s economic advisory councils. One of those that remained after the initial wave was the CEO of Oracle, from whose company a petition was released urging the tech sector to stand against the president’s immigration ban.

USA Today wrote “More than 130 tech companies—from Apple to Zynga—have signed the amicus brief. Oracle and IBM have not.”

And so it was, in the eyes of many, that Oracle’s CEO was in favour of the policy.

Chatterji and Toffel refer to a Weber Shandwick survey regarding customer approval of CEO activism. In it, 40% of respondents said they would be more likely to purchase from a company if they agreed with the CEOs position. 45% would be less likely to buy if they disagreed.

In short: silence is no longer an option. CEOs must take a side, because appearing to support a disagreeable endeavour is just as bad for business as actually supporting it.

That doesn’t mean you take a side in order to protect your bottom line, of course. Which takes me to my next point.

Authenticity is Vital

In 2016, Global Strategy Group asked consumers what issues they believed companies should take a stand on. The results were wildly inconsistent.

Most notably, responses regarding issues directly related to business operations were remarkably varied. While around 84% said business should take a stance on pay equality, only 77% believed they should have a say on issues specific to their industry. Approximately 62% said companies should speak up about Obamacare – a social issue that would nevertheless impact business – and 57% said they should have an opinion on gender-neutral products.

A similar case was argued about gender politics. 71% supported CEOs talking about race relations, yet transgender issues found themselves tied with big-game hunting near the bottom of the list at 44%.

What does that tell us?

First, it confirms that consumers want CEOs to support their social and political ideologies rather than advocating for broad change. Most of the issues at the low end of the list – issues like abortion and the legalisation of marijuana – already receive wide popular support, so it can be assumed that conservatives don’t want business leaders adding their voice to a cause they don’t agree with. That’s no surprise.

More importantly, it proves that no matter what topic a leader chooses to back, it won’t lead to unequivocal support from customers. But that should never be the reason to speak up about a social or economic injustice.

What’s important is that leaders recognise what matters to them, and so advocate openly in support of it. As Saleforce’s Marc Benioff puts it, “Today CEOs need to stand up not just for their shareholders, but their employees, their customers, their partners, the community, the environment, schools, everybody”.

There will still be risks involved, but here’s the thing…

It’s Working

When North Carolina introduced a law that said individuals could only use bathrooms allocated to the sex assigned to them at birth, Paypal’s Dan Schulman and several other CEOs pulled out of business in the state. The Associated Press estimated that the bill cost the state $3.76 billion in lost business over 12 years.

When Under Armour’s CEO called Trump “a real asset to this country”, tweets from endorsers including basketballer Stephen Curry and ballerina Misty Copeland forced the company to take a full-page ad out in a newspaper clarifying his position. By that time, Under Armour’s stock had already been downgraded.

Entrepreneurial activism is more than just a timely movement. It is a legitimate force for change.

In their conclusion, Chatterji and Toffel discuss an experiment conducted regarding a controversial law. Their findings imply that “public opinion…was shaped more by the message than the messenger”.

What this means is that it doesn’t matter how much influence you have as a leader, nor the size of your network. What matters most is making the decision to call for change, and the courage to stand by your values.

So get out there – on the streets, and on the internet – and let your voice be heard, knowing you are making a difference.


Read Chatterji and Toffel’s full report here.

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