When the political ideology of CEOs intertwines with corporate leadership: How partisanship leads to moral (dis)engagement
- Prof Batsakis
- Apr 8
- 5 min read
We can all agree that in our today’s world top executives are increasingly involved in political discussions, and the outcomes of their involvement is rather controversial. The question of how a CEO’s ideological leanings influence corporate decisions is more relevant and timely than ever before. Indeed, recent controversies spurred around the figure of Elon Musk (see, for example, his political forays into White House affairs and subsequent influence on Tesla and X (formerly Twitter).
These are some notable examples of how the political ideology of CEOs can influence a firm’s ethical standpoint, reputation, and broader social footprint. For both think tanks and policymakers, understanding the interplay between CEO political ideology, ethical decision-making, and moral (dis)engagement is crucial for shaping and improving future governance frameworks. In so doing, I draw on two recent academic works, this of Fewer and Tarakci’s (2024) titled “CEO Political Partisanship and Corporate Misconduct” published in the Academy of Management Journal, and Gupta, Fung, and Murphy’s (2020) paper titled “Out of Character: CEO Political Ideology, Peer Influence, and Adoption of CSR” published in the Strategic Management Journal. In this article, we aim to examine how CEOs’ political ideology may foster or suppress ethical conduct, not just within the corporation but even on the public stage.
CEO political ideology: a fresh perspective
Traditionally, executive decisions were often driven and explained in terms of leadership personality traits and other personal or external characteristics, such as risk aversion, strategic fit, or market pressures. Today, however, the political proclivities of CEOs have gained a fresh perspective, mainly because more and more chief executives publicly share their opinions on sociopolitical developments, mainly becoming vocal via social media channels. The partisanship of CEOs is even quantifiable through publicly shared donations to candidates during elections (see Figure 1). This, in turn, leads to polarization in terms of social and political issues. Fewer and Tarakci (2024) argue that understanding a CEO’s partisan strength, that is, how strongly a leader identifies themselves with a liberal or conservative position, can go a long way toward clarifying why certain ethical lapses occur in major corporations. Their findings show that political ideology is certainly more than a superficial preference. In fact, it partly represents a CEO’s core corporate and social identity. Highly partisan leaders on both ends of the political spectrum may see the world through a narrower lens. Specifically, the authors find that in-groups are deemed morally superior, while out-groups can be dismissed or distrusted. Such one-sided identification can limit these leaders’ ability to anticipate or empathize with stakeholders (e.g., customers, employees, or community members) who do not share the same worldview. In turn, an “us vs. them” mindset can erode checks on unethical behaviour.
From ideological values to moral disengagement
So, where does moral disengagement come in? Drawing on social psychology, moral disengagement refers to the cognitive process by which individuals justify questionable or harmful actions while maintaining a positive self-image. CEOs with strong partisanship might concurrently champion a moral cause for their favoured constituency (e.g., boosting advanced manufacturing in a particular region), while rationalizing behaviour that goes against the values and benefits of broader stakeholder groups, such as the environment or workforce segments outside that favoured circle.
In Fewer and Tarakci’s (2024) study, partisan CEOs were more prone to corporate misconduct, partly because of the “moral licensing” effect, that is, when leaders believe they already hold the moral high ground, they can discount critiques of unethical conduct. This inward-facing perspective, coupled with a diminished capacity for perspective-taking, increases the risk of either ignoring red flags or coming up with justifications that dismiss affected parties. Put simply, a partisan leader might uphold strong personal ethical convictions yet fail to see the wrongdoings hidden in corporate decisions that negatively impact others.
Ideology and Corporate Social Responsibility (CSR)
Might a CEO’s ideology also foster ethical behavior, such as robust CSR initiatives, rather than misconduct? Gupta, Fung, and Murphy (2020) reveal that liberal CEOs indeed tend to favour socially progressive strategies more readily. Interestingly, their work finds that when conservative CEOs adopt visible CSR practices, it tends to surprise peers and boost imitation across the industry. See, for example, in Figure 2, the prevalence of CSR executive position among fortune 500 firms (2001–2013). Because observers see such “out of character” gestures as driven less by pure ideology and more by level-headed business logic, the ripple effect can be significant. Taken together, these findings imply that a leader’s political leanings can drive both negative outcomes (e.g., misconduct) and positive ones (e.g., surprising CSR commitments). The difference rests on whether the CEO’s own sense of moral certainty fosters open-mindedness or intensifies in-group/out-group biases. The duality is visible in Elon Musk’s case: his libertarian-leaning stances often translate into forward-thinking technological projects, yet his undisguised online confrontations and polarizing positions frequently spark ethical debates about misinformation, labour rights, and data privacy on X.
Political controversies and executive actions: The example of Elon Musk
Elon Musk’s ideological footprint is unique. Early on, he participated in White House councils, first with the Trump administration, then voicing strong critiques of government policy over issues such as environmental regulation and social media freedom. Musk’s unpredictability is phenomenal. It spans from switching from championing free speech to banning certain accounts or journalists. This exemplifies how a CEO can dramatically shape a platform’s norms. Tesla’s workplace culture controversies surrounding employee treatment underscore the tension: a CEO can communicate admirable missions (e.g., transitioning the world to clean energy) and still face numerous allegations of discrimination, union-busting, or misinformation. These tensions highlight the notion of moral disengagement.
Advocates for Musk point out his forward-thinking electrification strategy, championing an overarching moral goal: combating climate change. Critics contend that a focus on personal ideological objectives can obscure fundamental employee rights and user welfare. In short, the moral identity that drives innovation can also lead to a narrow oversight of ethical issues seen as secondary to the “greater cause.”
So, what lies ahead?
In a time marked by heightened political polarization, CEOs’ partisan identities are poised to become an even greater determinant of corporate ethics. On the one hand, strong ideological convictions can fuel bold visions—as Tesla’s success arguably demonstrates. On the other, unyielding partisan identity can breed selective moral concern and corporate misconduct, as Fewer and Tarakci (2024) warn. Ultimately, a better understanding of how and why a CEO’s political orientation influences misconduct, CSR, and stakeholder relations can help firms, watchdogs, and policymakers manage unintended ethical blind spots. While high-profile leaders like Elon Musk grab the headlines, the underlying lessons apply to any sector where corporate power and personal ideology intersect.
References for Further Reading
Gupta, Fung, and Murphy (2020)
Fewer, T. J., & Tarakci, M. (2024). CEO Political Partisanship and Corporate Misconduct. Academy of Management Journal (forthcoming).
Gupta, A., Fung, A., & Murphy, C. (2020). Out of Character: CEO Political Ideology, Peer Influence, and Adoption of CSR. Strategic Management Journal, 42(3), 529–557.