The phenomenon of chief executive officers (CEOs) taking activism stances on contested sociopolitical issues is increasing, yet it remains unclear how observing investors discern CEO intentions behind activism engagements, thereby shaping their judgments and subsequent reactions. By relaxing the assumption that CEO activism is an unabashed expression of personal beliefs, we propose the concept of CEO ideologically (in)congruent activism and develop a framework wherein investors may attribute CEO intentions underlying incongruent (versus congruent) activism engagements as more organization-driven (versus self-driven) interest pursuits, thereby leading to more positive investor evaluations and reactions. Furthermore, we argue that the positive effect of CEO ideologically incongruent activism on investor reactions will be amplified when the CEO owns a higher level of stock ownership but weakened when the firm receives a greater corporate social responsibility (CSR) rating. We corroborate our propositions using a sample of CEO activism events for S&P 500 firms from 2012 to 2021. Our findings demonstrate the heterogeneity and critical influence of CEO intentions behind activism engagements and shed light on how investors integrate multi-informational cues when evaluating and reacting to managerial incongruent behaviours.
This study examines how elites engage in prefigurative organizing and construct the institutional infrastructure for enacting alternative futures. We investigate their engagement in gender‐lens investing (GLI) within the global movement for gender equality in finance and investment. Using fuzzy‐set qualitative comparative analysis (fsQCA) of 28 GLI mutual funds and exchange‐traded funds, we diagnose how fund managers combine available resources to prefigure GLI as investment products, identifying distinct configurations of symbolic, relational, and material resources through which GLI is enacted and made recognizable and actionable in the present. In doing so, we show that prefigurative efforts are not exclusive to grassroots activism, and demonstrate that the infrastructure supporting alternative practices is built through elites' efforts to recombine existing institutional resources into proto‐infrastructure. We therefore contribute a combinatorial perspective of prefigurative organizing that highlights the role of elites, and introduces proto‐infrastructure as a conceptual device for theorizing how prefigurative practices begin to acquire an incipient institutional form prior to the full consolidation of institutional infrastructure. This combinatorial perspective offers a new and timely lens for understanding GLI, impact investing, and the gender equality movement under current political backlash.
Abstract A decade ago, climate transition fell outside the mandates of financial regulators, central banks, accounting standard‐setting bodies, and financial‐market actors. Today, it is central to financial‐market governance aimed at steering business conduct toward a low‐carbon economy. Drawing on a longitudinal study of climate transition as a financial governance concern from 2010 to 2021, we show how governance authority over emerging sustainability concerns is assembled when no actor has an established mandate to address those concerns. Informed by Latour's concept of matter of concern, our analysis reveals how climate transition became constituted as transition risk, was stabilized through the private industry‐led Task Force on Climate‐related Financial Disclosures, and was translated across interconnected governance sites. We develop a three‐phase process model of issue‐centric orchestration – issue emergence, stabilization, and translation – unpacking how governance authority is progressively assembled through the trajectory of transition risk. The study contributes to public–private governance research by showing how private governance initiatives can reshape and extend, rather than displace or reduce, public authority. It further advances orchestration research by showing how interdependent governance arrangements form around shared concerns across governance domains and jurisdictions.
Prior research views cash holdings, or high‐discretionary slack, as a buffer against shocks or a catalyst for strategic change. Drawing on stakeholder salience theory, we argue that cash can also reshape managers' interpretation and prioritization of employee hiring‐related claims, thereby increasing hiring, and that this effect is more pronounced when structural influences heighten the salience of those claims. Study 1, a large‐scale field study of Belgian firms, finds a positive but diminishing relationship between cash and hiring. This relationship strengthens under conditions of greater firm dependence on specific employee groups or following an exogenous legal reform, both of which are hypothesized to make the salience of specific employee groups more apparent. In Study 2, a vignette experiment offers causal support for the hypothesized mechanism, with employee salience cues strengthening how managers translate cash into hiring allocations. Combined, our findings contribute to research on slack resources and stakeholder salience by showing that managers use high‐discretionary cash not only for buffering or strategic change but also to respond to salient stakeholders.
Abstract Social exclusion is a persistent problem in elite professions. While scholarship has emphasized structural and cultural barriers, less is known about the relational practices and mechanisms through which social exclusion is sustained. Drawing on interviews with 84 lawyers, paralegals, and managers in elite UK law firms, we develop a conceptual model of how the blurring and affirming of social and symbolic boundaries between higher‐status and lower‐status groups reproduces social exclusion. We show how both groups blur and affirm boundaries across three domains: professional work, professional space, and systems of professional advancement. Boundary blurring makes symbolic boundaries more permeable, positioning lower‐status actors as prospective professionals, while boundary affirming maintains social boundaries around professional membership. We identify and theorize the illusion of progression as a relational mechanism emerging from intertwined blurring and affirming, constructing lower‐status roles as pathways into the profession even though progression is rare. The illusion perpetuates liminality by sustaining hope, individualizing failure and undermining lower‐status groups' collective challenge to social exclusion. Our findings advance understanding of the relational mechanism through which social exclusion persists in elite professions, show how boundary blurring can sustain rather than threaten status distinctions, and help explain why organizational diversity and inclusion efforts have produced little substantive change.
