Walk the Talk and Talk the Walk: CEO Political Ideology and Firm Value

Abstract

Many studies focus on firms’ response to the demands of owner-stakeholders (Bundy, Vogel, & Zachary, 2018), with little attention to and no consensus on why firms differ in addressing the needs of non-owner stakeholders, such as employees, customers, and communities (Bundy et al., 2018). Interestingly, this is despite growing realization among the CEOs that firms should have other objectives besides shareholder value maximization (TIME, 2016). Early studies identify many factors driving corporate social responsibility (CSR) and employee welfare policies, including industry competitiveness (Lincoln & McBride, 1987), institutional factors (Fudge, 2017), and organizational perspectives (Maon, Lindgreen, & Swaen, 2010). More recent research also examines the role of executive characteristics (e.g., Bhaskar, Li, Bansal, & Kumar, 2023) based on the idea that “people, not firms, are the ones that make decisions” in organizations (Arikan & Shenkar, 2022, p. 1488). Given the strategic importance of the CEO’s role, scholars have explored the importance of CEO characteristics, their interactions with a broad range of stakeholders, and their influence on corporate strategies (Hambrick & Mason, 1984; Wernicke, Sajko, & Boone, 2022; You, Srinivasan, Pauwels, & Joshi, 2020).