We examine employee responses to CEO activism, the increasingly common practice of CEOs taking public stances on socio-political issues. CEO activism may bolster employees' identification with their organizations and strengthen shared beliefs among employees. Alternatively, CEO activism may alienate employees if CEO stances contrast with employees' ideologies. We find that employee satisfaction is higher when CEOs engage in activism that is aligned with employees’ ideologies. Furthermore, firms with CEO activism experience a net inflow of productive, ideologically-aligned inventors, which contributes to increased firm-level innovation. The improvements in employee satisfaction and innovation constitute an important channel that connects aligned CEO activism to increased firm value.

Using a sample of U.S. IPOs from 2000–2019, we show that IPOs with at least one female director experience significantly greater underpricing on the first trading day. The effect is not attributable to the previously documented determinants of underpricing or other firm or director characteristics. The underpricing effect is the strongest after 2010—when pressures were placed on firms to diversify their boards—and the effect is mitigated in the very last years of the sample—where we find that gender-diverse board IPOs realize greater offer price revisions and final offer prices, relative to non-diverse board IPOs. The dynamic relation between board gender diversity and IPO price formation coincides with the timing of the diversity campaigns of BlackRock, State Street, and Vanguard, suggesting that investor demand for board gender diversity was not fully incorporated into IPO offer prices until this demand was widely publicized.