A broad, bipartisan majority of voters says corporate executives should spend less time virtue signaling on social issues and more on developing and selling their products, according to new research from a leading strategic data analysis firm.
The study by Brunswick Insights, which involved voters and chief executives of companies with more than $50 million in annual earnings, shows that most Democrats and Republicans are put off by “woke” messaging from C-suite offices.
Conversely, business executives themselves believe that their social messaging is important and that it has been successful, indicating a sharp divide between business elites and their consumers, the study found.
“We’ve always said that political speech and actions by senior executives is not part of a business strategy and detracts from shareholder value,” said Bill Flaig, a founder of the American Conservative Values Fund ETF, an exchange-traded fund that refuses to invest in companies publicly pushing a woke agenda.
Concerns about corporations embracing liberal causes appear to be growing: On Tuesday, the Republican chief financial officers of 15 states, led by West Virginia, sent a letter to financial institution executives threatening to pull some $600 billion in assets from those that are blocking financing for oil and gas projects in the name of global warming.
The Brunswick study, titled “The Intersection of Business and Politics,” labeled the rush by executives to signal their alignment with a liberal position on political and social issues “the talking trap.”
“In a highly complex civic, socio-economic and communications environment, there is enormous pressure on organizations to respond to everything that is happening,” the study states. “The efforts are all-too-often disbelieved as authentic — by people across every part of the political and socio-economic spectrum.”
By a margin of 2-1, the study showed “corporate executives are ‘out of step’ with broader public sentiment related to engagement on social issues.”
Of those surveyed, 63% of corporate executives agreed unequivocally that they should speak out on social issues, a view held by only 36% of the voters.
The divide is equally pronounced when it comes to the perceived effectiveness of woke corporate campaigns, according to the study. On that point, three-quarters of executives said the campaigns are effective, compared to 39% of voters.
“Corporate executives have vastly overestimated how much people want to hear companies discuss social issues,” the study states. “More often than not (and more often than ever), companies are talking, but who is really listening, and do they even agree with what they say?”
That gap existed among those who supported President Biden or former President Donald Trump in the 2020 election, according to the study. Among those who voted for Mr. Biden, “there is a 24-point gap between Biden voters and corporate executives on the effectiveness of corporate communication, and only 17% think corporate communication has been “very” effective,” the study states.
When the American Conservative Values Fund (ACVF) launched just over a year ago, Mr. Flaig said he and the fund’s directors did not think they would have to recalibrate its holdings very often. But business executives have repeatedly proved them wrong, he said.
He pointed to decisions by Delta Air Lines and Coca-Cola to side with opponents of election laws passed by Georgia lawmakers and their support of Major League Baseball moving its All-Star Game from Atlanta to Denver last summer.
“They economically hurt Atlanta, their home base,” Mr. Flaig said. “I’m always surprised at how often these executives speak out in favor of left-wing positions; it’s pretty frequent.”
Pegged to the S&P 500, the ACVF now has $33 million under management, and the fund is boycotting about 27% of the companies that comprise the S&P 500.
The fund’s biggest single holding is Microsoft, which Mr. Flaig leads to considerable “head scratching.”
“The problem is technology companies in general are just so liberal, but you can’t really have a fund with no tech stocks,” he said.
Twitter’s turnover at the top this week is a case in point, Mr. Flaig said. While departing chief executive Jack Dorsey has steered the company toward squashing conservative speech, investors are likely to take a new look at Twitter under its new leader Parag Agrawal.
The Brunswick Group conducted an online survey of 301 executives at companies with at least $50 million in annual revenue and 800 voters who reflected the 2020 voting divide between Sept. 29 and Oct. 7. The margin of error for the voters poll was plus or minus 3.39 percentage points and 5.61 percentage points for the executives poll.
The distrust among many Democrats is rooted in a belief the companies are insincere in their campaigns, while many Republicans simply do not want to hear executives’ views on social issues or disagree with the executives’ views, the study states.
The one issue on which a majority of all voters did see sincerity reflected in corporate campaigns was in their charitable work following natural disasters.
“Going work for the sake of appeasing the progressive Twitter mob might satisfy one sect of the population, but as a CEO you’ll only alienate customers and employees,” Mr. Flaig said. “This report demonstrates in no uncertain terms that any CEO who continues to force their company into politics is placing their own political agenda ahead of maximizing shareholder value.”
