Board Political Ideology Polarization and the Resolution of Social Activism

Given increasingly polarized political environments around the world, it is important to understand whether and how the polarization of political ideologies among corporate leaders shapes organizational decisions and actions. We focus on how political ideology polarization in the board influences the resolution of social activism targeting the organization. Contrary to what we observe in the political realm and society at large, where political ideology polarization acts as a source of division, our theory suggests that political ideology polarization among directors will enhance the board’s information-processing capacity and increase its ability to respond to social activism. To provide additional evidence for our proposed mechanism, we examine the moderating effect of three variables central to the ability of boards to effectively process information: CEO-to-board relative power, organizational diversification, and the competitive intensity of the organization’s industry. Overall, we find support for our arguments; political ideology polarization in boards seems to improve information processing and strategic decisions, as reflected in resolving social activism. However, the positive effects of polarization are also subject to the influence of important contextual factors. Our study contributes to organizational research by considering the important influence of political ideology polarization in corporate leadership and its implications for understanding strategic leadership and governance dynamics, strategic decision making, stakeholder management, and other organizational outcomes.