Gender Inequality, Social Movement, and Company Actions: How Do Wall Street and Main Street React?

Companies face pressure from different stakeholders to address various environmental, social and governance issues. In their efforts to engage with these issues, they might pursue symbolic or substantive actions, either pre-emptively (proactive) or in response to specific targeted threats (reactive). Yet we know relatively little about how different stakeholders react to this repertoire of corporate actions. We ask this question in the context of gender inequality, an issue that has become increasingly salient for companies due to heightened societal attention culminating in the #MeToo movement. We analyze reactions to corporate actions among two stakeholder groups: “Wall Street” (investors) and “Main Street” (the general public). Our sample includes 886,000 company-day observations covering 442 companies between 2015 and 2020. We record 607 gender-related corporate actions across this sample. We find that while Wall Street does not react to any type of gender-related actions, Main Street punishes symbolic and reactive actions with reduced consumer perceptions of brand equity and declining social media valence. Their negative reaction is not evident before the #MeToo movement but is strong in its aftermath; moreover, the reduced consumer perception is moderated by negative social media. Our study shows that not all firm actions are created equal, and not all audiences value them equally, and highlights that it is important to delineate the different groups of stakeholders and their responses to different types of firm actions when making strategic decisions about how to act.