A Moral Foundations Perspective on CEO Political Ideology

As a reflection of their fundamental value systems, CEOs’ political ideology has come to be regarded as a major predictor of their strategic decision-making. Among the most persistent characterizations in this literature, liberal-leaning CEOs are considered to exhibit a distinct preference for evenhanded outcomes and pro-social corporate practices due to their ideological endorsement of equality—an association derived from the conceptualization of political ideologies along the motivated cognition perspective and routinely used to differentiate them from their more conservative peers. Yet, moral psychologists increasingly call for a broader understanding of the moral values differentiating liberals and conservatives. We therefore introduce moral foundations theory to the study of CEO political ideology, according to which liberal- and conservative-leaning CEOs differ in their focus on individual- versus group-centric concerns but, contrary to the existing consensus, should both endorse evenhanded outcomes and pro-social corporate practices. We find evidence for corresponding U-shaped rather than linear effects of CEOs’ political ideology in a sample of over 1,600 S&P 1500 CEOs. As such, we offer a novel theoretical perspective on CEOs’ political ideology and its organizational ramifications.