5 - Why Do Companies Care About Public Opinion?

Summary

This chapter asks whether companies are aware that consumers might support boycott in response to their political activities. I argue that larger companies, companies led by women, and companies with valuable brands are most likely to be vulnerable to backlash. Evidence for this chapter comes from two sources: corporate reports and interviews. Specifically, I use 10-Ks, reports that publicly traded companies file with the Securities and Exchange Commission (SEC) and which are intended to provide stockholders and potential investors with relevant information about the company. Although women CEOs are rare, I find evidence that companies led by women are more likely to cite concerns about the kinds of issues that a public backlash can cause, as are larger companies. Further, I find evidence that suggests that companies are particularly worried about this with reference to brand and reputation damage rather than revenue. I supplement this with evidence from interviews with people with first-hand experience of corporate decision-making and find that companies are quite concerned about the risk of boycott and understand the threat inherent in their political influence-seeking.