When CEOs Get Political, Companies Can Get Risky
In recent years, CEOs have become far more vocal about politics. Some speak out on social issues. Others donate heavily to political causes. Many are increasingly seen not just as business leaders, but as political actors. This raises an important question: does a CEO’s political views affect how their company behaves?
In research published in the Academy of Management Journal, co-authored with Murat Tarakci, evidence suggests to us that the answer is yes—but not in the way most people expect.
It’s not left versus right
A common assumption is that liberal CEOs behave differently than conservative ones, and that one side may be more prone to certain types of misconduct than the other—for example, that conservative leaders are more likely to cut corners on environmental regulations, while liberal leaders may be more aggressive around financial reporting or labor practices.
However, the data do not support this view. Analyzing Fortune 500 companies between 2010 and 2018, our research finds no meaningful difference in corporate misconduct between firms led by liberal CEOs and those led by conservative CEOs. What matters instead is something else entirely.
The real risk factor: political partisanship
The key distinction isn’t which side a CEO is on, rather, it’s how strongly they identify with a political side. In the paper, we introduce the concept of CEO political partisanship, defined as the strength of a CEO’s identification with a political or ideological group. In simple terms, this captures how far a CEO is from the political center, whether to the left or the right.
The main finding is striking:
Companies led by strongly partisan CEOs—on either side of the political spectrum—are significantly more likely (nearly 50% more likely) to engage in corporate misconduct than companies led by politically moderate CEOs.
Why does partisanship matter?
The explanation is not about policy preferences or ideological values. Instead, it has to do with what it means to define your self-concept by your politics. Political partisanship is a form of social identity. When people strongly identify with a political group, research in political psychology shows two tendencies often emerge:
Reduced perspective-taking: Strong partisans are less likely to consider viewpoints outside their own group. In organizational settings, this can translate into less attention to how decisions affect employees, consumers, regulators, or communities.
Heightened moral certainty: Paradoxically, strong partisans often see themselves as occupying the moral high ground. This sense of moral superiority can make it easier to rationalize questionable behavior because actions are seen as justified, necessary, or aimed at a “greater good.”
In corporate leadership, this combination can be dangerous. Leaders who feel morally certain and less attentive to external perspectives may be more willing to bend rules, overlook harm, or excuse misconduct, all while still viewing themselves as ethical actors.
This isn’t about ideology—it’s about governance
One of the most important implications of the research is that political extremity, not political direction, drives risk. We can see clearly in the data that highly partisan liberals and highly partisan conservatives look remarkably similar in how their firms behave. What distinguishes them from moderates is not what they believe, but how tightly their political identity is bound up with their sense of self.
For boards, investors, and regulators, this suggests a need to rethink how political engagement by executives is evaluated. The concern is not political speech or civic participation. These are not inherently problematic. Instead, it is when a leader’s political identity becomes so central to them that it crowds out their ability to have accountability, humility, and perspective-taking.
Why this matters now
As political polarization intensifies, more executives are being pulled into public political battles. At the same time, companies face heightened scrutiny around ethics, compliance, and social responsibility. This research offers a cautionary lesson: strong political identities at the top can quietly shape organizational behavior in ways that increase risk, even when leaders believe they are acting virtuously.
Read the full paper here: https://doi.org/10.5465/amj.2022.0909