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Study says Tim Cook’s LGBTI activism has helped to boost Apple’s profits

Study says Tim Cook’s LGBTI activism has helped to boost Apple’s profits

Tim Cook with student at Trinity College, Dublin, during a visit in November 2015

A new report has concluded that CEOs who speak out on contentious issues, such as Apple’s Tim Cook speaking out in support of LGBTI rights, can lead to their companies selling more products.

The report, entitled Do CEO Activists Make a Difference? Evidence from a Field Experiment, was authored by Aaron Chatterji, of Duke University – Fuqua School of Business, and Michael W. Toffel, of Harvard Business School.

The study’s starting point was that several high-profile CEOs have generated press for speaking out on a range of issues not obviously related to their core business.

It specifically looked at Apple CEO Tim Cook – who came out as gay in late 2014 – and his decision to publically speak out against the passing of the Religious Freedom Restoration Act (RFRA) in Indiana in early 2015.

Other prominent business leaders to speak out against the Indiana bill included Salesforce CEO Marc Benioff and Angie’s List CEO Bill Oesterle.

Chatterji and Toffel call this ‘CEO activism’, and point to similar statements from other CEOs concerning gender equality, clean energy, race relations and gay marriage.

They set out to find out whether such statements alienated customers or fostered brand loyalty.

They specifically surveyed people to determine whether Cook’s activism had an effect on the intent of consumers to purchase Apple products in the near future, and whether his belief that a religious freedom law might lead to discrimination had an effect on public opinion or not.

They found that people who were already supporters of same-sex marriage were less likely to support Indiana’s RFRA after being made aware of Cook’s comments about it leading to discrimination. Opponents of same-sex marriage were not influenced by Cook’s comments either way.

However, the study found ‘strong evidence’ that those consumers who were aware of Cook’s comments then reported a higher intent to purchase an Apple product. Again, this was mainly driven by people who are already supporters of same-sex marriage.

‘These results suggest that CEO activism can serve as a signal, letting consumers know where a company leader stands on a controversial issue, potentially galvanizing support and generating goodwill for the company, especially among those who already support the CEO’s stance.’

The author’s say that CEOs speaking out on issues that are of personal importance with them can often strike a chord with consumers – to a greater extent than companies advocating on social issues that are not immediately relatable to their core business.

‘Corporate initiatives suffer enduring suspicion that they are thinly veiled attempts to enhance brand equity and attract customers, rather than good-faith efforts to translate corporate values into social impact.’

It concludes that CEOs speaking out on contentious issues are less likely to be viewed with the same suspicion.

Besides Cook’s personal advocacy, Apple has consistently issued statements in support of LGBTI rights. In early 2015, it was among the companies to sign a Friends of Court Amicus Brief calling for the recognition of same-sex marriage across the US.

The tech company has consistently scored the top mark of 100 in Human Rights Campaign’s Corporate Equality Index, and, on Friday, it was announced that it was one of several high-profile corporations to condemn the passage of a religious freedom bill HB 757 in Georgia.

‘When a consumer sees a CEO step out of the board room and into the public arena to defend equality, it sends a strong message’

In a statement to Gay Star Business, Deena Fidas, Director of the Workplace Equality Program for the Human Rights Campaign, said: ‘This further proves that equality is good for business.

‘Across the country, more and more business leaders like Tim Cook and Marc Benioff are standing up against the discrimination that affects their customers and employees.

‘They are leading in the fight for LGBT equality not only because it’s the right thing to do, but because they have worked hard to build companies where equality, diversity, and fairness are celebrated values. And when a consumer sees a CEO step out of the board room and into the public arena to defend equality, it sends a strong message about what their values are.’