Into the age of the political CEO

Brexit, Trump and social agendas mean CEOs collide with politics more than ever before: how should they handle it?

Back in the day, cautious corporates kept their heads down and avoided politics like the plague.

But developments in the UK and the US – not least the arrival of Donald Trump and Brexit – have found CEOs compelled to take a stand.

Trump’s equivocal reaction to the Charlottesville violence triggered mass resignations from, and the dissolution of his business advisory council.

His stance on climate change has also led to friction with and speaking out from Wall Street.

Similarly Brexit and the rise of populism in the UK have seen business leaders increasingly concerned to make their position clear on key issues like access to the single market, citizens’ rights and free movement of Labour.

But do CEOs make good politicians, and are they right to dabble, even if they feel compelled to do so by the perceived need to send a signal to their employees and customers?

The study, The Political CEO: An Event Study Comparing Consumer Attributes of CEO Behaviour, published in Social Science Quarterly in 2014, makes interesting reading: it makes plain that there is a clear differentiation in consumers’ minds between political overtness by corporate leaders which is seen as being ‘down to the company’ versus views held that are strongly personal to the CEO himself or herself.

In the latter case, the business concerned can suffer commercial harm. It is exacerbated when views touch on race or gender politics, or on organisational culture. Product boycotts and damage to brand equity are just two of the key pieces of collateral damage.

Donald Trump is, of course, the prime example of businessman-turned-politician. Views will be mixed as to the success of the transition. But it does set an interesting precedent, which has now triggered rumbling and persistent speculation since the start of the year that Facebook’s Mark Zuckerberg is considering a 2024 bid for the Presidency.

Given that company’s ubiquity and pervasiveness, opinion may well be divided as to whether such a move would work, were it to happen.

But it is just another sign of the way in which the CEO has now truly entered the political age, and needs yet another skillset to thrive in our increasingly fractious world.