CEO Sociopolitical Activism as a Signal of Authentic Leadership to Prospective Employees

Abstract

Despite evidence on the increasing centrality of moral approaches to leadership for extant employees, management research provides little guidance on whether and how prospective employees come to draw conclusions about such leadership in their employer choice. Therefore, this paper integrates authentic leadership into signaling theory to identify CEO sociopolitical activism—a public and costly expression of personal political values by a company's highest and most visible leader—as an effective signal that is interpreted by job seekers to evaluate the CEOs’ degree of authentic leadership. Three experiments, including a parallel design for causal mediation inferences, and a field survey support that authentic leadership attributions mediate the positive impact of CEOs’ activism on job seekers’ employer attractiveness evaluations and employer choice. This mediation is attenuated when the activist CEO's espoused political values are incongruent with those of the job seeker and when the CEO engages in activism due to customer pressure rather than personal convictions. These findings primarily contribute to signaling theory and the literature on authentic leadership. For practitioners, the paper identifies a unique leadership signal that can contribute to an employer brand while cautioning about the costs this signal might impose on companies’ diversity.