Nearly 70% of America's top executives are affiliated with the Republican Party and 31% with the Democrats.
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That is according to the recent paper "The Political Polarization of Corporate America," written by Elisabeth Kempf, associate professor of business administration at Harvard Business School, Vyacheslav Fos of Boston College, and Margarita Tsoutsoura of Cornell University, Liz Mineo, Harvard University, writes.
The Gazette recently spoke to Kempf about why so many executives favor the GOP and the potential dangers of the increasing partisanship at the top of corporate America. The interview has been edited for length and clarity.
GAZETTE: Can you talk to us a bit about how you measured the partisan shift among top executives at American companies?
KEMPF: We started out by gathering data on the top five earning executives in U.S. S&P 1500 firms. These are large, publicly traded U.S. companies that must disclose the names of their top five earning executives to the Securities and Exchange Commission.
Then we needed to figure out who is Democrat, who is Republican, and who is independent, and to get that, we matched these executives to voter registration records from nine different U.S. states. That way, we were able to see the political composition of the executive team.
We define partisanship in the paper as the degree to which the political views within a team are dominated by a single political party.
We measure it by the probability that two executives from the same team are in the same party.
We saw that the measure of partisanship has increased quite a bit over time.
We're looking at 2008 to 2020, and during that period we saw that it has increased by 7.7 percentage points, which is quite a sizable change.
GAZETTE: Your paper found that 69% of U.S. executives are Republican, and 31% are Democrats. How and when did the shift take place?
KEMPF: Voter registration data limits us with how far back in time we can go. We can only look at 2008 and afterward. Alma Cohen, a professor at Harvard Law School, and her co-authors looked at CEOs and their political contributions and found that they have been donating primarily to the Republican Party for quite some time (at least since the year 2000).
The fact that CEOs are heavily Republican-leaning or that they contribute heavily to the Republican Party is not that surprising. What's interesting is that there hasn't been a strong shift toward more Democratic executives even though that's what a lot of observers might have expected. You may have heard about "woke capitalism," and many companies are speaking out in favor of progressive issues, and yet we don't see a strong shift toward more executives leaning toward the Democrat Party.
In fact, there has been an increase in the share of Republican executives during our sample period, from 63% in 2008 to 71% in 2018. It seems to be that there hasn't been an ideological shift necessarily in the executive suite, and their public statements may have more to do with how it could be perceived by their customers, by their employees, or by investors rather than their own political ideology.