Having a politically partisan CEO can lead to more company misconduct, study
Subscribe to enjoy similar stories. Companies with stridently political CEOs are more likely to engage in corporate misconduct, according to new research.
And that’s true regardless of whether the leader leans conservative or liberal. “It boils down to an elevated sense of self-worth and a degree of entitlement," says Thomas Fewer, an assistant professor of strategic management at Rutgers University and the paper’s lead author.
He says people with strong political convictions tend to have an “us versus them" mentality that discounts the opinions of others, as well as an unwarranted sense of moral superiority. “They grant themselves a moral license," through which they rationalize bad behavior, he says.
Fewer and co-author Murat Tarakci, a professor of innovation strategy at Erasmus University in the Netherlands, reached these conclusions after an analysis of misconduct at Fortune 500 companies between 2010 and 2018. The researchers measured misconduct via a third-party database of cases brought by more than 450 federal, state and local regulatory agencies that resulted in penalties of $5,000 or more, and created a metric for partisanship based on the amount and frequency of the CEO’s donations to political candidates and affiliated organizations.
They controlled for demographic differences such as age and gender, along with variables such as CEO tenure, board independence and the company’s financial health. Although some CEOs are politically prolific on social media, the researchers deliberately excluded this type of discourse from the analysis to avoid what Fewer characterizes as a generational divide between predominantly younger CEOs who view platforms like X as political bully pulpits and an older cohort of
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