Briefly describe the pros and cons of CEO Activism.

Question

What will be an ideal response?

Answer 1

In general, people want CEOs to speak up about social and environmental issues and according to a 2016 survey by Weber Shandwick, 40% of Americans think CEOs have a responsibility to speak publicly about today’s hot topics. At the same time, when the issues a CEO actively takes a stance on are not connected to a company’s business, one third of Americans look less favorably on CEO activism.
CEO activism can also affect purchase intent. Forty percent of Americans indicate they would purchase products from a company whose CEO’s opinion on issues agrees with theirs, while 45% say they are not likely to buy from a company when they disagree with the CEO. Further, Americans are often not sure if a CEO’s motivation for speaking out is genuine or self-serving (e.g., for media attention) and this too can affect purchase behavior.
Additionally, nearly half of all Millennials indicate they will buy from a company when they are in agreement with a CEO’s position on a particular issue.
To avoid negatively impacting their company’s bottom line, a CEO will best serve his or her stakeholders by being vocal about the same social and environmental concerns the stakeholders also value, while also staying on point with issues related to the company’s business.