Abstract

This dissertation examines the role of CEO activism as a form of nonfinancial communication that
shapes how firms are evaluated by external market intermediaries. As CEOs increasingly take
public stances on controversial sociopolitical and environmental issues, questions arise about how
such behavior is interpreted by third-party experts and whether it influences firm-level outcomes.
Focusing on two key information intermediaries—ESG rating agencies and sell-side financial
analysts—this dissertation explores the dual role of CEO activism: as a reputational signal of
corporate advocacy on public policy and social reform and as a potential source of value-relevant
information.
The first chapter investigates whether CEO activism is associated with higher ESG ratings. Using
hand-collected data on CEO activism events among S&P 500 firms from 2010 to 2019, the study
assesses whether public statements made by CEOs on societal issues are perceived by ESG
agencies as credible signals of corporate advocacy on contentious societal issues or dismissed as
symbolic gestures. The findings suggest that activism can positively influence ESG ratings,
particularly pronounced when CEOs speak out on more controversial issues where the credibility
of CEO activism gesture is heightened.
The second chapter explores how financial analysts respond to CEO activism by examining its
effect on analyst forecast accuracy. Analysts, as forward-looking information intermediaries, may
interpret CEO activism as a useful and credible nonfinancial information that signals strategic
direction and corporate value—or as low-quality noise that increases uncertainty. The results show
that, on average, CEO activism improves forecast accuracy, especially in firms with stronger
governance, greater transparency, and less controversial issue engagement.
Collectively, the findings contribute to the literature by framing CEO activism as both a genuine
expression of corporate values and a useful form of nonfinancial communication. In ESG
evaluations, CEO activism is seen as a credible expression of corporate leadership and linked to
higher ESG ratings. Analysts, by contrast, treat it as a source of nonfinancial information that
informs forecasts. Together, the chapters show that the impact of CEO activism depends on the
lens of the external experts, shaping how executive voice is understood in capital markets.