Define CEO activism and describe how CEO activism has changed as a result of social media? What are the risks and opportunities to consider with CEO activism? Give an example of a CEO who has spoken out on a social issue.

Question

What will be an ideal response?

Answer 1

CEO activism happens when corporate executives speak out on social or environmental issues that may not be tied to the corporate bottom line or business core. The expectation that businesses will become involved in social issues is increasing. Where CEO silence has been the traditional approach, the constant availability of social media has changed that. CEO activism, especially as it relates to social media, can help shape public opinion on controversial social issues and increase interest in buying by consumers who favor the company’s point of view. While the trend for CEO activism is on the increase, some issues are more accepted by the public than others. When Starbucks CEO implemented the “Race Together” campaign, many consumers criticized him for bringing social issues into the retail market while others embraced his effort to address racial issues. When Target CEO announced that men could use women’s bathrooms and dressing rooms, many customers boycotted the store. CEO activism can increase customer loyalty from those who agree but can alienate customers who disagree. Millennials are more likely to expect CEO activism from corporations and would question why a company is not speaking out on social issues.