One might wonder why a CEO would talk about a divisive political topic – especially when it’s unrelated to their core business model. After all, why would you want to hear what the guy selling beans has to say about politics? 

New research coming out of Cornell Tech suggests you might be on to something.

In a paper titled “When (Not) To Talk Politics in Business,” published Feb. 25 in Strategic Management Journal, researchers illuminate circumstances under which it is more or less beneficial for CEOs to talk about politics.

“We’re not looking here at people who go out in the streets and protest because of their own convictions. We’re looking at multi-billion-dollar firms. If they’re doing something, there’s usually a business reason,” said Tommaso Bondi, assistant professor of marketing at Cornell Tech and at the Samuel Curtis Johnson Graduate School of Management.

Recent research has shown that CEO political activism is on the rise, but little existing research considers how different types of companies and political issues might influence business outcomes – which is what Bondi and co-authors Vanessa Burbano of Columbia Business School and Fabrizio Dell’Acqua of Harvard Business School decided to explore.

The researchers created three fictional firms: one expected to lean Republican (an oil firm in Alaska), one Democrat (a tech firm in California), and one centrist (a food and beverage firm in Pennsylvania).

The researchers conducted two survey-based experiments to investigate reactions to CEO activism, or lack thereof. One survey, conducted in November 2020, studied CEO endorsements for that year’s U.S. presidential election, won by Joe Biden. The second survey was conducted in January 2021 and studied opinions about Congress certifying election results following the Jan. 6 storming of the Capitol.

The paper is one of the first to explore the distinction between a company passively saying nothing about an issue versus announcing an apolitical stance – actively communicating that the company will nottake a stand.

“We wanted to be very clear about this distinction between being silent and apolitical, especially for firms expected to have a clear political orientation in the first place,” Bondi said.

In the first study, the researchers observed how reactions would change if the companies’ CEOs took stances on the election: pro-Trump; pro-Biden; explicitly apolitical; or silent.

The results? On average, people preferred that business leaders avoid discussing divisive political topics. CEO activism had a polarizing effect: Along with amplifying negative reactions, extremely positive views also increased – just not enough to compensate for the negativity.

“A lot of political communication appears to be sub-optimal. It’s just not good for average perception: The cons outweigh the pros,” Bondi said.

What’s more, if participants expected a company to lean one way politically, communicating a clear apolitical stance increased positive perceptions. And if participants expected a company to be neutral, complete silence proved to be just as good an approach as taking a stand.

For the second study, the researchers studied a less-polarizing political issue: whether Congress should certify election results following the Jan. 6 attack, which around 74% of the U.S. population agreed with. In that case, a CEO agreeing with the popular opinion increased positive reactions.

“Consumers appear pretty naive in not questioning the company’s motives. They like the message, so they take it at face value,” Bondi said. “From a CEO’s perspective, that’s low-hanging fruit.”

Lastly, the researchers wanted to see what would happen if partisan donations backed a CEO’s political stance. They found that, instead of making political communication more credible, donations amplified participants’ reactions – whether positive or negative.

These results suggest that, on average, people don’t want business leaders to express political opinions – unless, of course, they agree with them.

Bondi said future work should examine how companies might fire up a particular base, even at the risk of alienating others. For example: Robert Unanue, the CEO of Goya Foods, known for selling Latino pantry staples, might have taken a pro-Trump stance following the 2020 election to court new, right-leaning consumers. 

However, that was banking on the fact that the left-leaning members of Goya’s consumer base wouldn’t look elsewhere for legumes. In the end, a 2022 Cornell paper found that despite boycotts, Goya sales temporarily increased after the CEO took his stance.

“It’s very risky,” Bondi said. “You don’t know what you’ll lose, and you don’t know what you’ll gain.”

Grace Stanley is a staff writer-editor for Cornell Tech.