CEO political activism - jobseekers want bosses who take a stand

Chief executives who speak out on political issues and take a principled stance are increasingly sought out by job seekers who believe such behavior signals fair treatment, respect for employees and a more responsible vision beyond nurturing the bottom line, new research shows.

People are over 20 percent more likely to want to work for a company where the CEO takes a humanistic stance on a political issue unrelated to their business, according to the research. This effect is true, regardless of age, education, gender of the job seeker or their political orientation - and the job seeker does not need to agree with the CEO's views.

What the researchers say: "We had expected people to be attracted to principled, politically active business leaders, but we were surprised to find that graduates did not necessarily need to share their opinions to find them appealing," said one of the three authors of the study.

"If we take an issue like gun control, people are much more likely to want to work for a company when the CEO stands up for greater gun control, regardless of whether the job seekers themselves are pro- or anti-gun control. We see exactly the same effect for other issues like same-sex marriage and immigration. Employees want their CEOs to take the more liberal, humanistic stand whatever their own position might be. It seems CEO principles are counting for more and more in today's jobs market," he added.

Chief executives around the globe have become increasingly vocal about social and political issues in recent years. Last month, Qantas Chief Executive Alan Joyce—who has spoken out on indigenous rights, same-sex marriage and gender equality—vowed to continue campaigning on social issues and maintains it has improved the Qantas brand.

Many in the U.S. have been galvanized particularly by President Donald Trump's hardline stance on immigration, including Tim Cook of Apple. And ethical practice has been brought into sharp focus globally by a raft of corporate issues, arguably led by the Facebook data scandal and that company's response.

For many years, managerial convention has been to shy away from taking a principled stand on current affairs and politics, fearful of alienating customers, key clients, governments or shareholders. Crane believes that is now changing for good and CEOs need to take heed of this change to ensure they continue to attract top candidates.

The researchers said there was limited knowledge about the impact a CEO might personally have on attracting talent to a company. He chose to conduct the study in the U.S. because of the recent increase in political activism by CEOs there.

But the study showed that not all activism will appeal to prospective employees—and principles might prove costly if they are not deemed the “right” principles.

"Interestingly, our findings show that the positive effect of CEO activism disappears if the CEO becomes politically active to oppose humanistic values, such as when leaders speak up against same-sex marriage," said the lead researcher.

"People are more likely to want to work for a company with a CEO that takes no stand whatsoever than one where he or she comes out against such issues. It seems that when CEOs speak up, they should speak up for humanistic values if they want to have a positive spill-over effect for their company," he said.

The study also found the effect was more pronounced when a female CEO engaged in political activism. The researchers said gender stereotyping—that a female management style is more often associated with attributes such as care or concern for others—might be a significant factor in attracting potential employees.

"Our research suggests people perceive such activism as more congruent with the role of a chief executive officer when the CEO is a woman. There is an assumption that potential employees will implicitly expect women leaders to be more likely to speak up for humanistic values," he said.

Regardless of gender, CEO behavior was found to play a powerful part in job seekers' expectations of a company.

"Potential employees expect goodwill from companies that are run by a CEO openly engaging in humanistic values and infer from this signal that employees at that company are treated fairly and with respect," the authors said, adding that pride and social status might be attached to being associated with a company doing the “right thing.”

Ultimately, however, it will not be enough to write “CEO activism” into the role profile alongside tough financial performance targets. Such activist behavior must be authentic.

"If the stand is just talk without action, then employees will see through this and it could easily breed discontent. Taking a genuine political stand that leads to tangible action is critical," the authors said.

So, what? Lee Iacocca died last week. Perhaps the greatest CEO that America ever produced. Many wanted him to run for President, and he might’ve won. He was known as the best example of a transformational leader (the sort of leadership which is often classed—as the researchers say—as being more of a “feminine” style of leadership, which is focused on developing and protecting followers.

As the researchers say, what employees are looking for is a transformational leader - and they see CEO activism as code for that - as well as a business they can be proud to work for.