Corporations and CEOs are increasingly expected to speak up and speak out on socially contentious issues. We examine investor and public reactions to corporate statements made in the aftermath of George Floyd’s death. We conduct content analysis of these statements and assess which Fortune 500 companies issued the statements, how long it took to publish them and through which channel, what sentiment the statements contained, and ultimately, how investors and the public reacted to them. Results show significant variation in how companies responded to George Floyd’s death and in how stakeholders reacted. Almost half of Fortune 500 issued statements and 99 made a pledge. Yet investors, on average, reacted negatively to these statements; and even more negatively if companies made a pledge. Surprisingly, they reacted more positively to statements with more positive and negative emotion. The public reaction on Twitter, on the other hand, resulted in more negative emotion and anger in response to tweets of companies with more conservative CEOs. The longer it took to issue the statement, the fewer replies and words in these replies the public used. Domestic firms generated more negative emotion and swearing in replies to their tweet. Other elements of tweets generated other public reactions. Our study sheds light on the trade-offs involved in organizational decision-making regarding social issues and the subsequent evaluations by different stakeholders.
