Who Rules America?  By G. William Domhoff, University of California at Santa Cruz

Power in America

Maximizing Corporate Profits or Doing the Right Thing? White Male Fortune 500 CEOs, New CEOs, the Ukraine Morality Test, and the Right to Abortion

by Richard L. Zweigenhaft, Guilford College

Originally posted April 2022; updated July 2022

In the middle of the 20th century, virtually all of those who ran the largest companies in the USA were white men. Fifty years later, as the twenty-first century began, 96.2% were white men. Now, a fifth of the way into the 21st century, 85% are white men. Therefore, the number of women and non-white Fortune 500 CEOs has increased, especially in the last few decades, but white men, who make up about 38% of the general population, are still very much over-represented atop America's largest corporations.

Much attention has been paid to whether or not the women and nonwhite CEO newcomers, those that Domhoff and I have called "the new CEOs" (though now some of them have been around for a while), are more likely to encourage their companies to enact policies and endorse causes that lead to better treatment of their employees, make for a more sustainable environment, or support social justice. Are companies that hire these new CEOs more likely to treat women employees, or LGBTQ employees, better? Are they more likely than other companies to promote diversity in the management ranks? Are they better environmental citizens?

We asked some of these questions in our 2011 book, The New CEOs: Women, African American, Latino, and Asian American Leaders of Fortune 500 Companies (Zweigenhaft and Domhoff, 2011). In a section titled "Are the companies that have hired new CEOs rated better than other companies?" we looked at ratings of corporations in 2008 and 2009 in order to compare those that had hired new CEOs to those that had not. We used five different ratings: 1) "The 100 Best Companies for Women," an annual rating by the magazine Working Mother; 2) "The 100 Best Corporate Citizens," an annual list compiled by the magazine Corporate Responsibility; 3) The Corporate Equality Index (CEI), an annual list compiled by the Human Rights Campaign, designed to evaluate policies and practices relevant to lesbian, gay, bisexual and transgender employees; 4) "The 100 Best Companies to Work For," an annual list compiled by Fortune Magazine; and 5) "The NAFE 50 Top Companies For Executive Women," a list compiled by the National Association for Female Executives (NAFE).

When we compared the companies that had hired new CEOs with a matched sample of companies that had not, the results were mixed. A higher percentage of the companies that had hired new CEOs appeared on three of the five lists, but not on the other two lists. When we combined the data for the five lists, and compared those companies that had appeared on any of the five, the companies that had hired new CEOs scored higher than those who had not (51% to 40%), but the difference was fairly small and not statistically significant.

Moreover, and surprising to us, when we looked separately at the ratings for the various subgroups of new CEOs (white women, African Americans, Latinos, and Asian Americans), we found that the companies that had hired white women scored worse, not better, than the companies that had only hired white men. We concluded that the white women CEOs were no better and no worse than the white male CEOs. We drew the following conclusion:

This finding is consistent with what we know of the women CEOs we have studied, who seem to be as likely to have behaved badly as other CEOs... Linda Wachner, former CEO of Warnaco, was known for her autocratic and abusive behavior toward subordinates (she was labeled by one journalist as "hell on high heels"). Similarly, observers described Yahoo CEO Carol Bartz as "hardened" and "occasionally ruthless," and Esquire, emphasizing both her harshness and her proclivity for off-color language, titled an article it ran about her in May 2020, "Hi, I'm Carol Bartz... Are You an Asshole?" And... after she became so angry that she shoved a Korean American employee, former eBay CEO Meg Whitman went through mediation and settled out of court for an alleged $2000,000 to avoid a lawsuit. In short, we conclude that the women CEOs are not all that different from the men CEOs (Zweigenhaft and Domhoff, 2011, p. 101).

More recent research, however, has shown that companies with women and minority CEOs are more likely to treat employees better and endorse progressive policies. For example, in a study of corporate policies over a ten-year period, Glass, Cook & Ingersoll (2016, p. 495) found that companies with more women in leadership positions (CEOs and on their boards) were significantly more likely to pursue "environmentally friendly strategies," and they were more likely than other firms to offer "LGBT-friendly policies" (Cook & Glass, 2016, p. 1431). In another study based on ten years of corporate behavior, Glass & Cook (2017) found that the companies with women and minority CEOs were more likely to have demonstrated "stronger business practices" (such things as being known for bringing innovative services and goods to the marketplace) and "stronger equity practices" (such things as charitable giving and donations to non-profit organizations).

In recent years, political events have put increased pressure on corporations to take stands against legislation enacted by right-wing governors and legislatures. For example, when in March 2016 the Republican-controlled North Carolina legislature passed the infamous "bathroom bill" (House Bill 2, or HB2) which required transgender people to use bathrooms in government and public buildings that corresponded to the gender on their birth certificate, companies like Bank of America and PayPal took public stands against the legislation, and both the NCAA and the NBA canceled events scheduled in the state and moved them elsewhere. It was estimated that this legislation was going to cost the state billions of dollars. A settlement was reached in July 2019 that prohibited the state from requiring transgender people from using the bathrooms corresponding to that on their birth certificate (Chatterji and Toefffel, 2018; Levin, 2019).

Similarly, after anti-LGBT legislation passed in Florida, more than 150 corporations, including American Airlines and Marriott, signed a letter written by the Human Rights Campaign opposing the legislation. Although Disney had been one of the first corporations to support gay rights for its employees, the company decided not to sign the letter, leading to various protests by employees, including an employee walkout at the Disney Studio in Burbank, CA. The New York Times referred to this corporate "squall" as "a high-profile example of a stark shift in corporate culture: A socially conscious generation of workers are demanding that their employers speak out on contentious social and political issues" (Barnes, 2022).

In fact, when and if corporations take stands on environmental and social justice issues has become a topic of so much interest to many researchers that some academicians use acronyms like CSA for "corporate sociopolitical activism" (Bhagwhat, Y., Warren, N. L., Beck, J. T., Watson, G. F. (2020)., and ESG for "environmental, social and governance issues" (Coy, 2022).

The dilemmas faced by CEOs are quite real, as they are under considerable pressure to increase profits for their boards and shareholders but they are also under pressure from consumers, the media, and their own employees to have their companies "do the right thing," and sometimes doing the right thing can mean a decrease in profits. The following two studies, one based on Russia’s invasion of Ukraine, the other based on the Supreme Court's decision to overturn Roe v. Wade, examine the responses to these dilemmas.

Study #1: The Ukraine Morality Test

Wars provide a great opportunity for those who run big corporations to provide assistance to one side or the other (sometimes for profits, sometimes for ideological reasons, sometimes for both). In his book Spain in our Hearts: Americans in the Spanish Civil War, 1936-1939, Adam Hochschild (2016) describes the crucial support that Texaco gave to Franco's military during the Spanish Civil War, and how the company then provided support to Germany during World War II (so, too, according to some, did IBM provide strategic technological support to Hitler's Nazi government even after Germany's 1939 invasion of Poland; see Black, 2002).

Russia's invasion of Ukraine on February 24, 2022, provided an unexpected opportunity to assess the moral behavior of American CEOs, including the new CEOs atop Fortune 500 companies, in a systematic way. Immediately after the invasion, the NATO countries, including the USA, imposed economic sanctions on Russia, and soon many corporations began to pull out or suspend operations in Russia. In an attempt to encourage more companies to participate in the boycott, Jeffrey Sonnenfeld, a professor at the Yale School of Management, and the founder and CEO of the Chief Executive Leadership Institute, organized a team of researchers that began to compile a list of those companies that had and had not pulled out or ceased operations in Russia. Initially the list included a few dozen companies, but the number soon burgeoned to more than 300. The media paid great attention to this list — there were hundreds of media reports, including many articles in mainstream publications, excoriating the companies that had continued with business as usual in Russia. The extensive media coverage put considerable pressure on those companies and their CEOs to do so (see, for example, Millbank, 2022, Matsuyama, 2022, and Sonnenfeld and Tian, 2022).

Comparing the boycott of Russia to the withdrawal of companies from South Africa in the 1980s, Sonnefeld asserted that "The ultimate goal is to help companies work in concert with...governments that have exacted economic sanctions...{which] rarely succeed alone. They need fairly universal support of the business community to truly paralyze an economy." In its interview with Sonnenfeld, The New York Times called this decision on the part of corporations "the Ukraine morality test" (Yale School of Management, 2022).

Because Sonnenfeld's list changed daily, as more and more companies joined the boycott, I chose to use the list from March 16, three weeks after the invasion began. By that time, Sonnenfeld and his team no longer had just two ratings, those that did and those that did not join the boycott, but they had four ratings, ranging from 1) "Withdrawal, clean break, surgical removal," to 2) "Suspension, keeping options open for return," to 3) "Scaling back — reducing current operations and holding off new investments," to 4) "Digging in — defying demands for exit or reduction of activities." The March 16 list included 427 companies, most in the first two categories, Withdrawal (147) and Suspension (173), with fewer in the other two categories, Scaling back (70), and Digging in (37). An academic through and through, Sonnenfeld gave grades to the companies in each of the four categories: A, B, C, and F.

Most of the companies on Sonnenfeld's list were not on the 2021 Fortune 500 list. Some were on the Fortune 1000 list but they ranked between #501 and #1000, some were headquartered in other countries (many of these were on Fortune's list of the Global Elite), some were law firms, and some were fairly specialized organizations, like the Women's Tennis Association and the World Boxing Association. Still, 101 of the 427 on the March 16 list were Fortune 500 companies, and the CEOs of 22 of these companies were men and women I had identified as "new CEOs" (see Zweigenhaft, 2022, for the list of the 77 new CEOs in 2021). I compared the 22 companies with new CEOs with the other 79 companies, coding for the four categories Sonnenfeld and his team had created. The results can be seen in Figure 1.

Figure 1: Stance on Russia by corporations with New CEOs vs. White Male CEOs (March 16, 2022)

The samples are small, but intriguing patterns can be seen, especially in the "Digging In" and "Withdrawal" columns. None of the companies with new CEOs dug in, compared to 9% (7 of 79) of the companies with white male CEOs. In contrast, only 9% (2 of 22) of the new CEOs made what Sonnenfeld's team calls "Withdrawal, a clean break, surgical removal," compared to 22% (17 of 79) of the companies with white male CEOs. The companies with new CEOs were much more likely to fall in the middle two categories, "Scaling Back" and "Suspension," than were the companies with white male CEOs (91% as opposed to 70%).[1] There were no obvious differences among the subgroups of new CEOs (white women, African Americans, Latinos and Asian Americans), but the sample sizes in each of those subgroups were very small.

By March 26, the Sonnenfeld list included 498 companies, and he and his team had added a fifth category between "Scaling Back" and "Digging in," one they called "Buying Time," by which they meant "holding off new investments" (the letter grade it received was a D). Only five of the newly included companies were on the Fortune 500 list (most, again, were global companies or ranked between #501 and #1000 on the Fortune 1000 list), and only one of the five was a company headed by a new CEO. By April 7, their list included more than 600 companies.

Figure 2: Stance on Russia by corporations with New CEOs vs. White Male CEOs (April 7, 2022)

Figure 2 shows that in Sonnenfeld's April 7 list, the pattern remains much the same as in March: none of the companies headed by the new CEOs were in the Digging In category, but 9% of the companies headed by white males were; 12% of the companies headed by new CEOs were in the Withdrawal category, but 24% of the companies headed by white male CEOs were in that category; 88% of the companies headed by new CEOs were in the middle three categories, compared to 68% of the companies headed by white male CEOs.

The results of this updated "Ukraine morality test" (Swisher, 2022), are still mixed for companies with new CEOs — they were less likely to pass with flying colors and receive a grade of A (by complete withdrawal) but they were also less likely to fail and receive a grade of F (by digging in).

Therefore, on the Ukraine morality test, using both the March 16 and April 7 lists, the new CEOs do not appear to be all that different from the white male CEOs. The results are similar to our assessments of the companies that had hired new CEOs back in 2008 and 2009.

Study #2: Women CEOs and Reproductive Rights

In June 2022, the Supreme Court overturned Roe v. Wade, and, as a result, women lost the constitutional right to abortion that had been in place since 1973. As was the case when Russia invaded Ukraine, some corporate leaders took public positions that contested this decision, and some corporations announced that they already had, or soon would put in place, policies designed to assist their employees when it came to healthcare assistance related to abortions. Just as Jeffrey Sonnenfeld and his team of researchers had monitored what became a rapidly growing list of corporations that responded to Russia’s invasion of Ukraine, a group at Rhia Ventures created a database to track corporate responses to the abortion bans at the Supreme Court and in various state legislatures. They monitored corporate policies in four areas (communication affirming abortion access; policies covering abortion related travel; paid time off for abortion travel and recovery; and support for reproductive health care, rights, or justice organization) and only added the companies to their database after receiving permission to post the companies' names.

The list of companies with more than 500 employees grew from 68 to 111 from the first time I looked to a few weeks later (July 22, 2022). A survey of 290 U.S. public, private, and nonprofit corporations conducted by the Conference Board between June 30 and July 8 revealed that companies were more likely to address the issue of "women’s reproductive rights" internally than publicly, and they were less likely to take a stand on this issue than a number of other issues including racial equality, LGBTQ+ rights, vaccination and other COVID related issues, gender equality, anti-Asian violence, and sexual harassment in the workplace. Still, 111 companies with more than 500 employees had given permission to be in the database. The survey also found that 75% of the corporate respondents indicated that the decision about whether the company would weigh in on women’s reproductive rights would be made by the CEO alone or the CEO and "the senior management team." (Washington, 2022).

I used Rhia Ventures' July 22 list of 111 companies and looked up each company to see if it was a Fortune 500 company and if the CEO was male or female. Fewer than half were Fortune 500 companies (46 of the 111, or 41%). Some of the other companies were ranked between #501 and #1000, and some were based internationally (some of these were on the Global 500 list). Only three (6.5%) of the 46 CEOs of the Fortune 500 companies were women: Karen Lynch, CEO of CVS (#4 on the 2022 Fortune list), Jane Fraser, CEO of Citigroup (#44), and Lauren Hobart, CEO of Dick’s Sporting Goods (#307). During the calendar year of 2021, there had been 42 women CEOs of Fortune 500 companies (36 white women, two African American women, and four Asian American women), so 8.4% of the 500 Fortune 500 CEOs in 2021 were women. The fact that 6.5% of the companies that chose to be on this list were led by women CEOs, when 8.4% of the Fortune 500 companies are led by women (or were in 2021), suggests that the companies led by women were no more likely than the companies led by men to take public stands supporting abortion rights.

The larger question: What leads CEOs to "do the right thing"?

The larger question is what leads CEOs in general — male or female, white or nonwhite — to do the right thing, even when it might lead to a decrease in their company's profits. It is not likely to be a big risk for CEOs to endorse issues or programs that do not affect profits, and for some companies endorsing environmental or social justice programs might actually increase profits. To endorse programs that increase diversity in the management ranks, to support programs like A Better Chance or Prep for Prep that help provide elite boarding school educations to youngsters with limited resources (Zweigenhaft and Domhoff, 2003), or to contribute to programs like Big Brothers, Big Sisters, or to historically black colleges and universities (Domhoff, 2022, Ch. 5) may not entail any risk at all. A CEO probably can make sure her company provides better maternity leave, or other forms of child support, without doing damage to the company's bottom line. Some decisions, however, are especially hard for CEOs because they call for actions, not just words, that are likely to decrease profits.

CEOs, of course, also vary in their political and ideological viewpoints. Therefore, when it comes to childcare, the environment, treatment of LGBTQ employees, or a host of social justice issues, they bring their own values to the decisions that they and their companies must make. Although they are generally conservative, and in recent decades have been much more likely to contribute to the candidacies of Republicans than Democrats, some are liberal. Predicting the behavior of a particular CEO is difficult.

The data from (somewhat) controlled studies like these two based on Russia’s invasion of Ukraine and the Supreme Court decision to overturn Roe v. Wade are valuable, but so too are revealing case studies, often made possible by on-the-spot journalists, and also the telling actions and statements of individual CEOs. These can provide nuance that statistical patterns may miss. Consider the revealing example of Kenneth Frazier, an African American who was the CEO of Merck, a huge pharmaceutical company, from 2011 through 2021. Frazier took a number of strong public stands on several issues. For example, in 2017, after Donald Trump failed to condemn the white supremacists who marched in Charlottesville, Frazier resigned from a manufacturing advisory council to the Trump administration (Loftus, 2017). A few years later, when legislators in Georgia passed a law that would restrict the right to vote for African Americans, Frazier and Kenneth Chenault, another African American who had been the CEO of American Express from 2001-2017, organized a full-page ad, signed by 72 prominent black business leaders, protesting the legislation (Frankel, 2021).

However, when Merck was challenged with an issue that might reduce its (considerable) profits, Merck, with Frazier as its CEO, took a different stand. One of the key features of Biden's initial Build Back Better program was to allow Medicare to negotiate the cost of prescription drugs, as is done in other developed countries, a policy that was endorsed by more than 80% of Americans. In October 2020, as the Democrats battled over what was to stay in and what would be left out of the bill, the pharmaceutical lobby spent more than $1 million on television ads opposing this. When it came to lowering the cost of prescription drugs, Merck, along with other big pharmaceutical companies, lobbied hard to block the legislation. Frazier was quite clear that this had to do with Merck's profits: according to the New York Times, "he conceded in a recent call with reporters that the companies were fighting the proposal so hard because they believed it would slash their revenue" (Mills, 2021).

By 2022, when Jeffrey Sonnenfeld and his research team compiled their list of companies that had and had not taken their business out of Russia, Kenneth Frazier had stepped down as CEO of Merck (he retired in late June 2021). He was, however, still the Executive Chair of the Board, and therefore had a key voice in that company's decision. For a week or so, Merck was on Sonnenfeld's list of those companies that had dug in, but the bad press must have gotten to them, for by the time I used Sonnenfeld's March 16 list, the company was in the Scaling Back category (so the grade it received was a C). By March 26, when Sonnenfeld had added a fifth category, Merck dropped from Scaling Back to the new, fourth category, "Buying Time" (so the company's grade dropped from a C to a D), and this is where it remained on the April 7 list. As had been the case when it came to allowing Medicare to negotiate the cost of prescription drugs, when it came down to the prospect of losing business in Russia, profits trumped morality for Merck and Kenneth Frazier.


[1] This difference approached, but did not reach, standard levels of statistical significance: X2=3.53, df=1, p<.07. None of the other differences are statistically significant.


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