From Ann Lipton comes one more thing to worry about if you worry about CEO agency costs:
I mean, leaving aside the obvious pull on a CEO’s attention and time, Schultz – apparently while harboring presidential ambitions – announced that Starbucks would hire 10,000 refugees (a decision that, arguably, negatively impacted his company’s stock price). Bob Iger has had to navigate such highly charged issues as his presence on Trump’s Advisory Council, and the political commentary of Jimmy Kimmel at ABC, and Jemele Hill at ESPN. Facebook, of course, has had to address issues of foreign interference with American elections, and has recently announced that it will voluntarily require disclosures akin to those required of television ads. And that doesn’t even get into any gratuitous political speeches.
I’m not taking a position over whether these executives did the right or the wrong thing in each instance, but I am concerned that when CEOs simultaneously run their companies and run for president, it’s difficult to discern whether their political moves are intended to benefit the corporation (including, as relevant, all stakeholders), or their own political careers. Under these conditions, how can shareholders be certain that their CEOs’ actions – on everything from labor conditions to executive pay to environmental footprints – are intended to advance the best interests of the company?
Personally, I don't think this will keep me up at night. After all, unlike some especially pernicious ways in which CEOs misbehave, this one takes place in full public view. And, of course, it's not going to be a very common problem. Still, the conflicts inherent in a CEO running for POTUS probably justify boards asking the CEO to step down.
