New research suggests that a CEO’s socioeconomic background plays a significant role in their approach to corporate giving and employee welfare.
CEOs who identify as coming from lower and lower-middle-class families often engage in more corporate social responsibility, especially efforts aimed at improving education and housing for economically disadvantaged communities.
However, CEOs who identify as coming from middle, upper-middle, and upper-class families give back too. They tend to focus more on employee-centered initiatives, such as providing employees with more robust retirement plans and better union relations, as well as doing more to prevent layoffs.
These findings come from a recent study published in Human Relations by Joanna Tochman Campbell and Jennifer Kish-Gephart. Their findings result from a survey of CEOs and an analysis of databases of corporate practices.
The researchers suggest that these variations stem from CEO’s formative experiences. CEOs from lower class backgrounds grow up facing greater resource limitations and depend more on community support to get by, influencing their greater sensitivity to others’ economic needs. On the other hand, those from more affluent backgrounds tend to grow up less aware of others’ economic hardships, and so focus on helping people with less economic need.
These findings build on earlier research that reveals that individuals’ class origins shape their worldviews throughout their lives, even when they enter a new social class as adults. Congressional members from different social classes vote differently despite ending up in the same class: former workers tend to vote for more economically liberal policies than former white-collar professionals. The social class that college-educated professional workers grow up in also influences their ideas of work-life balance, how much to prioritize career advancement, and how to search for a new job.
Being aware of the effect of class origin can help workers and CEOs make more thoughtful decisions. This new study suggests that CEOs from across the socioeconomic spectrum take some steps to help those around them, though in ways aligned with their personal histories. Those from less advantaged backgrounds might consider further supporting their employees, while CEOs from more advantaged backgrounds could expand their focus to address the economic needs of their broader community.