One thing partisan voters agree on: Woke CEOs miss the mark

A broad bipartisan majority of voters say corporate executives should spend less time virtue signaling on social issues and more on developing and selling their products, according to research from a strategic data analysis firm.

The Brunswick Group study, titled “The Talking Trap,” shows that most Democrats and Republicans are put off by “woke” messaging from C-suite offices.

Conversely, business executives say their social messaging is important and successful, indicating a sharp divide between business elites and consumers, according to the study, which involved voters and chief executives.

“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, an exchange-traded fund that refuses to invest in companies that publicly push woke agendas.

Concerns about corporations embracing liberal causes appear to be growing. The Republican chief financial officers of 15 states, led by West Virginia, sent a letter Tuesday 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 climate change.

The study is a part of Brunswick’s “The Critical” series, which focuses on the intersection of business and politics.

“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-to-1, “corporate executives are ‘out of step’ with broader public sentiment related to engagement on social issues,” the study said.

Of corporate executives surveyed, 63% agreed unequivocally that they should speak out on social issues. Only 36% of voters held the same view.

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, compared with 39% of voters, said the campaigns are effective.

“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 appeared among supporters of both Joseph R. Biden and Donald Trump in the 2020 presidential 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 launched just over a year ago, Mr. Flaig said, he and the fund’s directors did not realize how often they would have to recalibrate the holdings.

He pointed to Delta Air Lines and Coca-Cola’s support of Major League Baseball’s decision to move its All-Star Game from Atlanta to Denver last summer to protest Georgia election laws.

“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 American Conservative Values Fund now has $33 million under management. 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 said 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. Chief executive Jack Dorsey is departing after steering the company toward squashing conservative speech, and investors are likely to take a new look at Twitter under the leadership of Parag Agrawal.

The Brunswick Group conducted an online survey from Sept. 29 to Oct. 7 of 301 executives at companies with at least $50 million in annual revenue and 800 voters who reflected the 2020 voting divide. The margin of error was 3.39 percentage points for the voters poll and 5.61 percentage points for the executives poll.

The distrust among many Democrats is rooted in a belief that the companies’ campaigns are insincere, and 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 voters did see sincerity was in corporate charitable work after natural disasters.

“Doing 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.”