Trust, Influence, and the Right Signals: Navigating Virtue Signaling in Business Deals

Many of us dealmakers invest significant energy in crafting our public personas, curating the image we present to the world. Every choice—from our tone of voice to the company we keep—can signal our place in society. It’s not just about appearance; it’s about sending the right “social signals” and reading the cues others put out.

Historically, markers of social status were obvious: family background, gender, and socioeconomic standing. These attributes largely determined an individual’s place in the social hierarchy. But as society has globalized, wealth has become more accessible, and status indicators have grown more nuanced. Now, cars and luxury homes—once markers of success—don’t hold the same mystique. Almost anything can be leased or faked, and public perceptions have shifted. So, what remains? Welcome to the world of virtue signaling.

In simple terms, virtue signaling is about projecting one’s values, morals, and ethics to establish social power. Often, we do this by aligning ourselves with causes, communities, or values that we think reflect positively on us. It might mean supporting environmental initiatives, speaking out on social justice issues, or publicly endorsing charitable efforts. While these actions can stem from genuine beliefs, studies suggest that the drive to “show off” plays a major role. This doesn’t mean all virtue signaling is cynical. It’s entirely possible to both care about a cause and recognize that supporting it boosts our reputation. In fact, in the social media age, signaling our values has become a near-universal part of human behavior.

One common form of virtue signaling is “slacktivism.” This is when individuals support causes without engaging in tangible action—for instance, posting about an issue but not donating to the cause. Slacktivism is often seen as hollow since it promotes a cause without any real commitment. Another common example is hypocrisy, where someone speaks about a value or issue but doesn’t live by those standards. We’ve all seen it: the corporation that loudly supports environmental causes while using environmentally damaging practices, or the influencer who talks about mental health but doesn’t treat their staff with respect.

When Virtue Signaling Gets Noticed

The irony of virtue signaling is that while everyone does it to some degree, it’s often only noticed when done poorly. In most cases, these subtle signals slip by unnoticed unless they’re exaggerated. When people overplay their hand, the disparity between their projected image and their perceived values becomes glaringly obvious. This is especially true when the actions contradict the intended message. Overly conspicuous displays of moral superiority can make others feel uncomfortable or resentful.

Take, for instance, the nouveau riche. Individuals who have recently acquired wealth often flaunt it in ways that seasoned wealthy individuals may avoid. They might wear designer clothes, drive flashy cars, and dine in upscale restaurants to broadcast their newfound status. However, this behavior can backfire, as it’s often perceived as a clumsy attempt at virtue signaling. In contrast, those accustomed to wealth might project their status through more understated means, signaling values subtly rather than with an overt display.

One reason virtue signaling can be negatively perceived is that it highlights an unpleasant aspect of human nature: the desire to manipulate perception rather than earn status. When someone is revealed to be inauthentic, their reputation can suffer, often permanently. This is because we instinctively mistrust individuals who misrepresent themselves. There’s an evolutionary basis to this: impersonation or dishonesty signals potential danger. Beyond this, virtue signaling that comes across as moral superiority can lead to defensiveness rather than trust, alienating the very people the signaler aims to impress.

In dealmaking, understanding the art of virtue signaling is especially important. Savvy professionals know that in the corporate world, impression management is vital for building rapport, establishing credibility, and showcasing alignment with shared values. Yet, a careful balance must be struck. Overdone virtue signaling can ring hollow, while understated values risk going unnoticed, missing an opportunity to build trust.

Virtue Signaling in Negotiations

Virtue signaling in negotiations can take many forms, from explicit statements of values to more nuanced gestures. The overt variety might involve a company proudly announcing its sustainability initiatives or its commitment to diversity. On the other hand, subtle signaling might consist of casual references to ethical decisions or even the decision to let actions speak for themselves. While grand gestures can have an impact, seasoned negotiators know that authenticity and discretion go further. This approach aligns with Paul Watzlawick’s insight that “one cannot not communicate.” Everything, from the charities we support to the connections we build, sends a message about our values and intentions.

Historically, social status was defined by wealth and lineage, but today, it’s measured by how well our values align with the communities we wish to impress. In a negotiation setting, virtue signaling can be an effective way to establish trust, but only if it feels genuine. When negotiators can calibrate their messaging to align with their own values and those of their counterparts, the result is often a smoother, more collaborative process. However, when the signals feel forced or insincere, they can erode trust, leading to friction rather than partnership.

The Pitfalls of Overplaying Virtue Signaling

Virtue signaling can go wrong if it’s perceived as insincere or self-serving. Common missteps include projecting moral superiority, appearing hypocritical, or simply overdoing it. Imagine a company that trumpets its diversity initiatives during a negotiation but has a reputation for poor employee treatment. If the other party is aware of the discrepancy, it can create a “credibility gap,” which makes it harder to establish trust.

In some cases, virtue signaling becomes so conspicuous that it feels patronizing. For instance, boasting about environmental efforts during a business meeting can come across as tone-deaf if the other party perceives it as an attempt to one-up them ethically. In this way, virtue signaling, when overdone, risks alienating others rather than building rapport. No one wants to feel looked down on, especially in high-stakes negotiations where both parties seek common ground.

Virtue signaling is also commonly observed in social media, where the “approval economy” thrives on displays of status, success, and values. The problem is that platforms like Instagram and Twitter have incentivized oversharing. While sharing values and beliefs can foster connection, oversharing can make those beliefs seem shallow.

The Art of Effective Virtue Signaling in Dealmaking

Despite its potential pitfalls, virtue signaling can be a powerful tool in dealmaking. Done thoughtfully, it establishes credibility, reinforces values, and builds trust without feeling forced. The key is to let actions speak louder than words. Instead of explicitly stating your company’s values, you can weave them into the conversation naturally. For example, if your company values environmental sustainability, share a story about a recent decision that reflects this commitment. By revealing ethical dilemmas the company has faced and the resolutions taken, you demonstrate integrity and commitment.

A crucial aspect of effective virtue signaling is understanding the values of the other party. In many cases, actions speak louder than words. Simple gestures, such as accommodating the other party’s schedule or listening more than speaking, can signal empathy and respect. These cues are subtle yet effective, as they create a rapport that fosters trust without overt declarations.

For virtue signaling to have a meaningful impact, it must be authentic. Overly obvious attempts at signaling values are likely to come off as insincere. Avoid the temptation to brag about ethical commitments. Instead, let genuine alignment guide the conversation. Recognize that your company’s values might not align with every potential partner, and that’s okay. By holding to core values, you build credibility and establish a reputation that speaks for itself.

Ultimately, virtue signaling is most effective when it emerges naturally from the context of the conversation. Suppose you’re discussing operational efficiency; a casual mention of a recent investment in renewable energy can signal environmental commitment without coming across as self-promotion. This subtlety enhances the impact of the message and reinforces your company’s image as values-driven.

The Long-Term 

Beyond individual negotiations, virtue signaling can shape an organization’s long-term reputation. When done consistently and authentically, it reinforces an image of integrity and commitment to ethical practices. This can set a company apart, especially in industries where public perception matters. Companies with strong reputations for sustainability, diversity, or social responsibility attract partners who share these priorities. This values-based differentiation builds trust that extends beyond specific deals.

Virtue signaling, when aligned with genuine practices, creates a positive psychological impression that smooths negotiations and fosters goodwill. It allows companies to establish reputations for integrity that precede them in future interactions, providing a competitive edge. By focusing on authentic signaling rooted in real values and mutual respect, dealmakers can foster relationships that last beyond the terms of the contract.

Virtue signaling, for all its pitfalls, remains an inevitable part of impression management. When approached thoughtfully, it becomes more than just a tactic; it’s an opportunity to reinforce genuine values, strengthen credibility, and forge meaningful connections. As dealmakers navigate the complexities of impression management, focusing on authenticity, subtlety, and alignment offers a way to leverage virtue signaling as a powerful tool for building trust, influence, and long-term success.