Shining a Light on Dark Money in Corporate Politics: Unveiling CEO Ideology’s Influence on Corporate Political Transparency

Abstract

Although calls for firms to disclose their political spending have intensified, nonmarket strategy scholars have yet to explain why some firms embrace corporate political transparency (CPT) while others remain opaque. We theorize that CEO political ideology serves as a critical antecedent of CPT. We argue that liberal CEOs, valuing stakeholder accountability, favor CPT, whereas conservative CEOs, prioritizing shareholder primacy and reputational control, resist it. We further argue that the effect of CEO ideology on CPT depends on contextual factors that shape the discretion CEOs retain in navigating CPT trade-offs. Using a sample of publicly traded firms covered by the Zicklin CPT Index, we find that CEO liberalism increases CPT, but this effect weakens when firm-specific political uncertainty is high, when industry-level transparency norms are strong, and when industry concentration is high. Our study recasts CPT as a value-infused choice contingent on boundary conditions that influence managerial discretion, extends upper echelons theory into the political arena, and advances political activity research.