CEO Political Partisanship and Corporate Misconduct

Abstract

Are firms led by liberal versus conservative CEOs more likely to engage in corporate misconduct? This study unearths the ideological bases of misconduct by distinguishing the values and identity perspectives of political ideology. Rather than attributing misconduct to liberal or conservative values, we introduce and examine CEO political partisanship—that is, the strength of a CEO’s identification with political and ideological groups. We hypothesize and find robust evidence for a positive relationship between CEO political partisanship and corporate misconduct in a sample of Fortune 500 CEOs from 2010 to 2018. Our findings thus contribute to the conversation on the role of political ideology in organizations by unearthing the organizational implications of political identities. As CEOs increasingly engage in political discussions and political divisions grow stronger, our study offers a timely warning about the harmful link between CEO political partisanship and corporate misconduct.