He sees them nearly every day, Michael Durney said — news articles about companies and their chief executive officers either making or walking back a “controversial stance” on topical issues.
These stances can touch on anything from gun control to climate change to immigration, but they generally don’t connect to the business’s operations. Durney, a University of Iowa researcher and assistant professor in accounting, said business leaders who express their personal views on social and political issues are an increasingly “vocal minority.”
He and other researchers have studied the impacts that statements like these have on investors for more than three years, and recently published their findings in the academic journal “Contemporary Accounting Research.”
The results of their study found that a CEO staying silent on issues garnered the same positive response from investors as when the CEO put out a stance that they would agree with, with a statement going out investors don’t agree with prompting a negative reaction.
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“I’m not saying that a CEO coming out and taking a stance on a controversial issue is positive or negative, but it’s certainly a growing trend,” Durney said. “And then, since the CEO is saying something that’s in the realm of accounting, because it’s a reporting choice they’re making, how does it affect investors? That’s sort of the natural question that we decided to ask, because we saw the growing trend.”
In order to learn about responses to different stances CEOs could take on well-known issues, or no stance at all, Durney said the team set up different groups of people in hypothetical situations where they had already invested $10,000 in a fake company and had $10,000 more to invest. Using gun control as a topic, each group was told that the CEO had either posted on social media supporting it, expressing a lack of support, or not commenting on it at all and then were asked how attractive the company was as an investment opportunity.
While they expected the decreased interest in investing after the CEO made a statement they didn’t agree with, Durney said the response to seeing nothing from the CEO on the topic was surprising. They found that people responded positively to not seeing the CEO express their views, even when prompted to do so online, just like how they responded to a view they agreed with.
“It’s pretty astounding that, if all you care about is investor reactions, the best choice, to say it bluntly, is just for the CEOs to just shut up and manage,” Durney said.
However, Durney said business leaders shouldn’t take these results as a directive to never express their views. Investors are only one part of a company that is influenced by its employees, the consumers of their product or service, the general public and more. CEOs should voice what they believe in if there is a change they truly want to make or an issue they think their perspective would aid in, he said.
“The takeaway shouldn’t be, don’t take stances on controversial issues,” Durney said. “I don’t want that to be the takeaway, because this is just one small piece of the puzzle.”
Two real-world examples Durney gave of the issues his research focused on is Elon Musk and the views he’s expressed on X, formerly known as Twitter, and when Jeff Bezos, owner of The Washington Post, halted the newspaper’s political endorsement in the 2024 presidential election.
Social media has amplified public figures’ voices when it comes to their personal views, Durney said, when before social media became popular there weren’t as many ways for people to share their thoughts on issues with a large, public audience.
This study came from the curiosity Durney and his fellow researchers had on a trend they saw growing, he said, and he didn’t have any goals for the research beyond the results it gave.
“I think it’s an interesting, surprising result,” Durney said. “The intellectual curiosity is enough for me, but I also think it helps people make more informed decisions, to the extent that they ever read these results, right? It helps people in companies who are coming out and taking controversial stances, they’ll make more informed decisions regarding how investors will react.”
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