When CEO Activism Backfires: How Morality Shapes Public Trust in Corporate Leaders

Ashy Drongo

16-10-2025

[…] for the fruitless searches for ultimate wisdom that usually result in absurdity, Zhuang suggests:
“Wise is the one who forgets what wisdom is supposed to look like.”

In Kingfisherish Wandering [1]

© Wix

In an era when business leaders are increasingly vocal on social and political issues [2,3], a new study by Kihyon Kim and Seon Min Lee [4] in Corporate Social Responsibility and Environmental Management explores how the moral character of CEOs determines whether their activism enhances or damages corporate reputation.

CEO activism—defined as a CEO’s public engagement with controversial sociopolitical issues—can build or break public trust [5,6]. While stakeholders often appreciate authentic moral leadership, they also scrutinize CEOs for self-serving motives. The researchers examined how two factors interact to shape public perceptions: the business-relatedness of CEO activism (whether the issue aligns with the company’s core business) and the CEO’s perceived morality.

Through an experiment involving 171 participants, Kim and Lee found that when a CEO’s morality was not questioned, business-related activism reduced perceptions of self-interest and enhanced corporate reputation. However, when a CEO’s morality was questionable, even business-related activism was viewed cynically—as image management rather than moral conviction. Importantly, these perceptions spilled over to the company’s broader corporate social responsibility (CSR) initiatives: a CEO perceived as self-serving weakened trust in the authenticity of CSR programs and, consequently, in the firm itself.

The findings reveal that moral integrity acts as a “precondition” for positive reputational effects of CEO activism. Inconsistent or unethical behavior erodes stakeholders’ belief in the genuineness of both activism and CSR, demonstrating how personal morality and professional communication are deeply intertwined.

CEOs who act with integrity embody relational awareness and moral responsibility, fostering not only social trust but also the collective peace essential for sustainable progress [7]. When morality guides activism, corporate influence can extend beyond markets to nurture societal and environmental well-being. Conversely, moral dissonance breeds cynicism, fragmenting both organizational coherence and public peace [8].

References

[1] Nguyen MH. (2025). Kingfisherish Wandering. https://www.amazon.com/dp/B0FVLLLXNW/

[2] Branicki L, et al. (2021). The morality of “new” CEO activism. Journal of Business Ethics, 170, 269-285. https://doi.org/10.1007/s10551-020-04656-5.

[3] Chatterji AK, Toffel MW. (2019). Assessing the impact of CEO activism. Organization & Environment, 32(2), 159-185. https://doi.org/10.1177/1086026619848144.

[4] Kim K, Lee SM. (2025). Self-Serving CEO activism? How the business-relatedness of CEO activism and CEO morality interact and spill over to CSR motives. Corporate Social Responsibility and Environmental Management. https://doi.org/10.1002/csr.70214 

[5] Mkrtchyan A, Sandvik J, Zhu VZ. (2024). CEO activism and firm value. Management Science, 70(10), 6619-6649. https://doi.org/10.1287/mnsc.2023.4971.

[6] Jin J, et al. (2023). Enhancing young consumer's relational and behavioral outcomes: The impact of CEO activism authenticity and value alignment. Public Relations Review, 49(2), 102312. https://doi.org/10.1016/j.pubrev.2023.102312.

[7] Vuong QH, Nguyen MH. (2025). On Nature Quotient. Pacific Conservation Biology, 31, PC25028. https://doi.org/10.1071/PC25028

[8] Nguyen MH, Ho MT, La VP. (2025). On “An” (安): Inner peace through uncertainty, nature quotient, and harmony with Dao. http://books.google.com/books/about?id=NIKMEQAAQBAJ