Is CEO activism threatening democracy?

Intervening in the boardroom alone no longer seems to be enough for a good number of CEOs who are becoming increasingly vocal about politics. The most prominent example is Elon Musk, who publicly endorsed Donald Trump during the 2024 US presidential election campaign and later accepted a government role offered to him by the newly elected president. Is Musk an exception, or does his foray into politics reflect a broader trend among CEOs? Could the growing political involvement of business leaders threaten democracy? And could similar dynamics emerge in Europe? During the 2024 US presidential campaign, Musk’s support for Donald Trump was hard to miss. The Tesla boss threw his full weight behind the Republican candidate on his social media platform X and at campaign rallies alike. As is well known, the “bromance” between the two men came to a sudden end after Trump’s election, with Musk’s political engagement having mixed effects on his image and on the companies he leads. Soon afterwards, another media-savvy CEO, Marc Benioff, voiced support for Donald Trump’s agenda. The Salesforce CEO and owner of Time magazine praised Trump for doing “a great job” as president and backed his intention to deploy the National Guard in San Francisco, before partially backtracking. A widespread phenomenon This may surprise Europeans, who are used to their business leaders keeping a low profile on political matters. In the U.S., however, such interventions are far from unusual. They are part of a broader phenomenon that began attracting attention around ten years ago and has accelerated since then: CEO activism. Our recent work focuses on this type of activism, examining how it can influence, and potentially jeopardise the proper functioning of democracy. Early activist CEOs Since the mid-2010s, a growing number of American business leaders have entered political debates. They do so either by expressing their views on divisive issues often unrelated to their companies’ core business or by openly advocating for one of the two major parties that dominate US politics. However, it would be wrong to think this behaviour is entirely new. American history offers several corporate leaders who could be described as “activist”. One early example is Henry Ford, founder and CEO of the car manufacturer that bears his name. In the first half of the 20th century, he made his political ideas widely known, notably through his anti-Semitic writings, and joined the America First Committee, which campaigned against the U.S. entry into the war in the early 1940s. A more recent example is Ross Perot, whom some see as a precursor to Trumpism. After founding Electronic Data Systems and amassing a fortune, Perot entered politics during Bush Sr.’s presidency. Styling himself as an outsider to the Washington elite, he ran twice as an independent presidential candidate, in 1992 and 1996. New communication strategies While CEO activism is not unique to our era, it has intensified in the U.S. over the past decade. This development has prompted substantial academic literature. Much of it examines how executives’ political statements affect corporate reputation and economic performance, but it also explores the implications on democratic life, as our work does. Why are more and more CEOs “on a mission”? Several forces may be driving the rise of CEO activism. One is generational: a new generation of business leaders appears more willing to speak publicly on political matters, partly to accumulate moral capital, and in turn, earn a reputation for virtue. Another is technological: social media and its new modes of communication reward short, polarizing messages that generate attention, clicks, and shares. Corporate sociopolitical activism CEO activism is one facet of a broader phenomenon often described as “corporate sociopolitical activism”, which refers to economic actors of all kinds taking stands in sociopolitical debates. Executives are not the only ones to weigh in. At times, political statements are made in the name of entire companies or the brands they sell. The latter is labelled “brand activism”. Although advertisements that resembled brand activism existed in the 1980s and 1990s – consider Benetton’s campaigns addressing issues such as racism or AIDS – brand activism has become especially visible in the U.S. over the past decade, mirroring the rise of CEO activism. One notable example is Starbucks’ “Race Together” campaign against racism in 2015. Other examples are Nike’s “Dream Crazy” campaign in support of Black Lives Matter in 2018, and Gillette’s “The Best Men Can Be” campaign in 2019, which criticised toxic masculinity in the form of harassment and sexism. These campaigns reflect, in part, consumers’ evolving expectations of the companies from which they buy goods. Some consumers now view purchasing as a political act in its own right and expect brands to uphold political values aligned with their own. US surveys suggest younger generations are, on average, more supportive of business activism than older ones. But these campaigns also reflect economic opportunism. Amid culture wars and political polarisation, firms may exploit divisions in US society for commercial gain. Political messaging often provokes boycotts from opponents, yet companies bet on an even larger “anti-boycott” from supporters. Nike’s “Dream Crazy” campaign, for instance, sparked a backlash. The hashtag #BurnYourNikes went viral, and the company’s share price and the brand’s approval rating initially fell. Ultimately, however, supportive customers helped the campaign succeed, boosting profitability. It appears that political emotions – attachment to a social cause or outrage at those who reject it – have become part of the emotional repertoire that capitalism can monetise. The risks to democracy Companies have long been political actors, seeking to influence public opinion and political decisions. Until recently, however, they largely operated behind the scenes through lobbying, campaign financing, astroturfing, and scientific disinformation. Corporate activism is different: it is public by design. As a new form of corporate political action, it may pose new risks to democratic systems. Because large corporations can amplify their messages with immense resources, ideas that serve their economic interests or align with the ideologies of their executives may gain disproportionate influence in the public sphere. There is also a risk that corporate sociopolitical activism further detoriates the already poor quality of public debate. By appealing to their customers’ political emotions, economic actors inevitably contribute to making them more intense. This is notably true for emotions associated with what political psychologists call “affective polarisation”, such as hostility toward people identified with the opposing political camp. Such emotional responses increase susceptibility to misinformation and reduce willingness to engage constructively with those who hold different views. These risks deserve deeper investigation, as do possible countermeasures. Unlike less conspicuous political practices such as lobbying, which are regulated by law (though to varying degrees depending on the country), corporate sociopolitical activism is currently subject to far less regulation. Coming soon to Europe? One could argue that the case for regulation is less urgent in Europe than in the U.S. In many European countries, most companies and their leaders remain reluctant to take overt political stances, at least for now. France is a prime example: brand activism is still rare, and CEO activism remains marginal. Some may object by pointing to Vincent Bolloré, a businessman who has built a populist right-wing media empire. Yet, as concerning as the influence of this media conglomerate may be, Bolloré is not an “activist CEO” in the strict sense of the term: he remains secretive about his personal political views and intentions – much like the Australian-American media mogul Rupert Murdoch, to whom he is sometimes compared. Even so, there are signs that corporate activism, including CEO activism, could spread in France in the coming years. Entrepreneur Pierre-Édouard Stérin, for example, has been open about the ideology behind his “Périclès” project, which aims to help right-wing parties gain power. Meanwhile, business leaders such as LVMH CEO Bernard Arnault are taking part in political debates more explicitly and assertively than in the past. Whether this develops into a sustained trend remains to be seen. When it comes to CEO activism, Germany stands out in Europe: As the far-right party Alternative for Germany (AfD) has grown, several business leaders have decided to take a stance against right-wing extremism. These include Joe Kaeser, chair of the supervisory board at Siemens Energy and former Siemens CEO; Verena Pausder, founder of several companies in the digital sector and chair of the German Startup Association; and Stefan Traeger, CEO of the photonics company Jenoptik. These public interventions have sparked a media debate in Germany about the effectiveness of such statements and the possibility that they could backfire and further strengthen the far right. There are also doubts about whether CEOs can be expected to continue opposing the AfD should it gain power in some German states. The U.S. experience is indeed sobering. During Trump’s first term, many people hoped that business leaders would be an effective check on executive overreach. They were enthusiastic about the fact that many CEOs were outspoken critics of Trump’s policies. However, their hopes were dashed in the second term when critical voices fell silent and supportive voices among business leaders became more common. In light of this development, it would be unwise to overestimate business executives’ commitment to protecting liberal democracy in Europe when push comes to shove.