CEO (In)Activism and Investor Decisions

Durney, Michael T.; Johnson, Joseph; Sinha, Roshan K.; Young, Donald

doi:10.2139/ssrn.3604321

Cited by 8 publications

(9 citation statements)

References 46 publications

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“…Closely related, the researchers also outline the risk of provoking a supplier-switch by customers who disagree strongly with the stated opinions (Durney et al , 2020; Melloni et al , 2019). That is, individual studies found triggers of coherent reactions to occur in situational versus volitional events (Mikeska and Harvey, 2015) and the a priori brand attitude (Leak et al , 2015).…”

Section: Resultsmentioning

confidence: 99%

“…These are ordered in a timeline-oriented way, representing the different potential areas of study when analysing incidents of CEO activism. After the concrete realisation of a CEO activist’s statement (Yim, 2019), several reactions of stakeholders may occur (Durney et al , 2020). These reactions depend widely on the specific moderator categories (Murphy, 2019), and they lead to specific perceptual effects that can be classified as the final consequences of the executives’ stances (Bedendo and Siming, 2020) (Figure 4).…”

Section: Resultsmentioning

confidence: 99%

“…Hambrick and Wowak (2021) showcase relevant negative reactions to silence where a stance is expected from an executive. As Chatterji and Toffel (2018) put it, “[in] the Twitter age, silence is more conspicuous—and more consequential.” However, stakeholders often project their own views on silent CEOs and, therefore, value this imagined opinion positively (Durney et al , 2020).…”

Section: Resultsmentioning

confidence: 99%

“…While individual studies find a positive impact on abnormal stock returns in response to CEO activism (Acharya et al , 2019; Mkrtchyan et al , 2020; Afego and Alagidede, 2021), others identified mechanisms like the firm’s relevance or investors’ political (mis)alignment that may lead to a contrary effect (Durney et al , 2020). Considering the case of several CEOs leaving the US president’s advisory council in 2017, Bedendo and Siming (2020) saw significant negative stock reactions because of investors’ fear of losing political influence.…”

Section: Resultsmentioning

confidence: 99%

“…the chosen issue’s relevance. This choice seems to affect perceived brand image (Yim, 2019; Gregory, 2020), investors’ decisions (Durney et al , 2020; Afego and Alagidede, 2021), perceived morality (Branicki et al , 2021), general favourability (Gaines-Ross, 2016) and consumer reflections (e.g. Mikeska and Harvey, 2015).…”

Section: Resultsmentioning

confidence: 99%

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CEO activism. What do we know? What don’t we know? A systematic literature review

Rumstadt

Kanbach

2022

SBR

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Purpose Chief Executive Officer (CEO) activism, i.e. executives, publicly weighing in on sociopolitical debates, is an area of increasing interest in academia and business. This young research field provides valuable insights, but it still represents a scattered discussion in a variety of disciplines. Thus, this paper aims to present a guiding framework, integrate current knowledge, aggregate published findings and outline avenues for future research. Design/methodology/approach The authors conducted a systematic literature review building on a sample of 36 publications. In consequence, 1,146 lead themes were derived and studied in an in-depth qualitative analysis by deploying a pattern-inducing method. Findings Research on CEO activism can be placed on a time-oriented logic, giving insights into the realisation of activism, stakeholder reactions, moderators and perception effects. These four aggregate dimensions can be explained by 15 second-order themes and 48 more detailed first-order themes. Practical implications Considering the risks and benefits of CEO activism, top executives and communication professionals should be aware of its implications. This paper provides an integrated view of the different mechanisms and potential effects of CEO activism. Thereby, it proposes communicative planning from activism’s realisation to its perceptual results. Originality/value The study provides a holistic view of CEO activism as a starting point for further discussion. To the latest of the authors’ knowledge, this work is the first integrated conceptualisation of the discussion of CEO activism. The proposed avenues for future research stem from a detailed examination of published knowledge.

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

See 3 more Smart Citations

CEO activism. What do we know? What don’t we know? A systematic literature review

Rumstadt

Kanbach

2022

SBR

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The effects of CEO activism: Partisan consumer behavior and its duration

Hou

Poliquin

2022

Strategic Management Journal

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Research Summary CEOs increasingly engage in activism on controversial social and political issues that do not directly affect their core business. Simultaneously, the general public is increasingly politically polarized. We examine how CEOs' support for gun control after two mass shootings differentially affected the behavior of liberal and conservative consumers and the persistence of these effects. Using mobile phone location data to measure store‐level visits, we find (a) consumer visits to stores decreased by 3%; (b) this decrease was asymmetric: visits in the most conservative counties decreased by about 5% but did not change in the most liberal counties; and (c) these effects dissipated within 10 weeks after activism. Our results highlight the strategic implications for executives pressured to take stances on controversial issues. Managerial Summary We study how consumers respond to CEO support for gun control, and how consumers' partisan views influence their behavior. Visits to the stores of several major retailers declined about 3% in the 4 weeks after their CEOs supported expanding background checks for gun purchases. In the most liberal counties, visits did not change following CEO support for gun control, while in the most conservative counties visits declined about 5%. Hence, the reaction of liberal consumers did not counteract the reaction of conservative consumers. We find, however, that these effects dissipated within 10 weeks; as a result, retailers whose CEOs supported gun control did not experience any long‐term, net decrease in sales despite the short‐term sales decrease in conservative counties.

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When Is CEO Activism Conducive to the Democratic Process?

Feix

Wernicke

2023

J Bus Ethics

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CEO (In)Activism and Investor Decisions

Cited by 8 publications

References 46 publications

CEO activism. What do we know? What don’t we know? A systematic literature review

CEO activism. What do we know? What don’t we know? A systematic literature review

The effects of CEO activism: Partisan consumer behavior and its duration

When Is CEO Activism Conducive to the Democratic Process?

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