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Corporations today acknowledge that apart from making money, they also have to serve a social purpose. To this end, Corporate Social Responsibility within corporations helps give back to the society in different ways. But taking off from there on a completely new tangent is the recent trend of CEO activism which has gained much media attention in the past couple of years.

When CEOs share their political beliefs and opinions and instigate actions based on them, it resonates with consumers, employees and stakeholders. Take the example of Disney CEO Bob Iger who cancelled a popular American show Roseanne after the star of the show made unfavourable remarks about President Obama’s top advisor, Valerie Jarret. The move was not just viewed as damage control but received positive press as an example of moral leadership. Studies have shown that 81% of tech professionals think that their CEO should take a stand and speak up about relevant issues. Here are four reasons CEO activism can strengthen your brand.

  1.  Media attention – CEO activism gets a lot of media attention. But this can work either positively or negatively to impact the company’s brand image. For instance, Dick’s Sporting Goods stopped selling AR15s after a school shooting in the USA and this earned the CEO Ed Stack a lot of flak from the National Rifle Association which is a powerful organisation that impacts politics in America. But there have been several positive outcomes as well for even a year later, the company is still in the news for their continued tough stance against selling guns to young people and their shares have risen by 20%.
  2.  Reinforce corporate values – Earlier, CEOs chose to remain neutral regarding political and controversial matters because they didn’t want any negative economic impact on their companies. But today, CEOs are using their corporate values as a take-off point to focus on the issues they espouse. Brian Moynihan, CEO of Bank of America states, “Our jobs as CEOs now include driving what we think is right. It’s not exactly political activism, but it is action on issues beyond business”. In fact, companies that don’t take a stand today are considered to lack authenticity and this affects brand positioning ultimately.
  3.  More engaged employees – When important figures such as CEOs talk about LGBTQ rights, immigration laws or other hotly debated topics, more people listen. Among employees, most of whom are millennials, this builds a sense of loyalty and pride towards the organization. Since collective action has greater impact, CEOs who raise awareness about issues are remembered better, which in turn embellishes the company’s brand story. Look no further than Apple’s Tim Cook for LGBT rights and Marc Benioff of Salesforce for prime examples.
  4.  Brand allegiance and trust – Being passionate towards a cause and talking about it openly helps forge stronger brand allegiance. When a company takes a stand on issues that are not connected with any of its commercial offerings, it proves to the consumers, employees and stakeholders that their ‘heart is in the right place’. North Carolina’s infamous bathroom law which limited people to the public restroom aligned with their gender at birth resulted in PayPal’s CEO Schulman cancelling the new global operations centre in Charlotte. Tough stances such as these, help build trust in the company and brand.

Corporations also face several challenges and risks when their CEOs get involved in causes sometimes leading to media backlash or negative financial impact. However, CEOs today continue to take on important social issues by writing opinion pieces or pushing their economic influence by funding political and activist groups or simply taking their businesses elsewhere. According to research, there are more benefits than consequences when CEOs choose a stance and stick with it.