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Limits of CEO activism: is there a responsibility to speak out?

Author: James Heskett, Harvard Business School (USA), Published on: 6 December 2017

"Summing Up: What Are the Limits of CEO Activism?" 6 Sept 2017

[One supporter of] CEO activism [said] “...Now more than ever, American society needs this kind of exchange of ideas.”...Referring to the specific action of...CEO of Merck, who resigned from a presidential appointment in protest, [another] said, “Frazier was showing true leadership. He should be commended even if the share price went down"... David Wittenberg [said]...“I don’t think it’s possible to formulate a rule that applies in every such situation”... The scariest part...is that leaders are coming under fire increasingly for what they didn’t say and...do"…There is a level beyond economic consequences—one involving values... [A]ll major business organizations participate in lobbying... CEO “activism”—taking a public stand or action for or against a social issue—is something else... [It] is not a simple decision driven only by personal feelings... it requires analyzing the economic consequences of any...action, something hard to do in advance... [It] depends on how strongly (and uniformly) a CEO,...board, and senior executives...feel about an issue... CEO of Medtronic...suggested at least one criterion that could suggest...limits[:]: “Today’s CEOs are public figures, with responsibility to uphold their company’s mission and values. When these values are violated, even by someone as powerful as the president of the United States, they are obliged to take a clear stand. In this era of instant global communications..., it is no longer possible to hide in the shadows.”

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Related companies: Medtronic Merck