CEO Activism: Whatʼs the Boardʼs Role?

“CEO Activism”—a term unheard of many years ago—is now a fact of corporate life and a growing challenge for corporate boards. While companies have been engaging in social and political issues related to their business for years through lobbying and political contributions, more and more CEOs are speaking out about issues that go beyond their core business. This new activism differs from the “corporate social responsibility” that has led companies to contribute to worthy causes such as disaster relief. As the term “activist” suggests, this new activity is by definition controversial.

Faced with heightened expectations about the role of the corporation in society, boards determine with management whether, and in what circumstances, the company should engage in taking public positions or otherwise engage in public discourse on matters of importance to key stakeholders. This new territory of company activism—beyond political contributions and lobbying—requires thoughtful navigation, and companies should be guided by the carefully considered best interests of the company with oversight provided by the board.

This report sets out the key issues and a set of questions for boards and management teams to consider in navigating a new territory of company activism. This resource can help directors and management to:

• establish the board's role and level of involvement in addressing social and political issues, and
• develop a proactive approach when determining whether the organization will take action in regard to social and political issues.