Why Do Corporations Engage in LGBT Rights Activism? LGBT Employee Groups as Internal Pressure Groups

Abstract

Abstract Most scholarship on corporate political activity assumes that market forces wholly motivate firms’ political strategies. However, this conventional wisdom overlooks the role of employee groups in encouraging corporate activism. To evaluate whether employee groups are associated with firm social activism, we gathered all public statements in support of LGBT rights made by the five hundred largest publicly-traded US corporations from 2011 to 2017. In an exploratory observational analysis, we found robust evidence that in highly-educated workforces LGBT employee groups persuade management to take public stances in support of LGBT rights. Our findings suggest that internal pressure promotes activism on LGBT issues, and market, political, or social forces are insufficient to fully explain firm social activism. Although each does play an important role, since employee groups will use political, social, and especially market-based arguments to convince their managers to engage in activism.