Business Commons^™

When Does Csr Payoff?, John A. Doukas, Rongyao Zhang

Finance Faculty Publications

We investigate whether firms engaging in corporate social responsibility (CSR) can preserve firm value during normal and unprecedented exogenous adverse events. Our evidence shows, in regular times, a negative relation between CSR engagement and firm value, but under adverse economic conditions, CSR protects firm value by decreasing firm risks. We also find that firms with high managerial attributes engage in greater CSR activities that benefit shareholders in both normal and aberrant financial times. Despite the controversy surrounding CSR, our evidence points out that CSR can be viewed as a set of intangible assets that can improve firm value across good …

Social Performance Feedback And Firm Communication Strategy, Heli Wang, Ming Jia, Yi Xiang, Yang Lan

Research Collection Lee Kong Chian School Of Business

Although corporate social performance has become an important measure of firm performance, there is little understanding about how firms respond to social performance feedback and how impression management may function as an important firm response to the feedback. Building upon and extending the literature on the behavioral theory of the firm and the strategic use of language, we examine how discrepancies between firms’ social performance and their aspiration levels affect how firms use visual expressions in their CSR reports. In addition, we argue that the relationship between social performance discrepancies and the use of visual expressions in CSR reports is …

The Effects Of Csr Reputation And Csr Crisis Response Strategy On Investor Judgments, Clarence Goh

Research Collection School Of Accountancy

I use a controlled experiment to examine, in the context of CSR crises, whether investors’ investment judgments are influenced by a firm’s CSR reputation and CSR crisis response strategy. I find that for good CSR reputation firms, the use of a rebuild or deny crisis response strategy does not lead to improvements in investment judgments. However, for bad CSR reputation firms, the use of a deny response strategy leads to improvements in investment judgments while the use of a rebuild strategy does not.

Corporate Governance Meets Corporate Social Responsibility: Mapping The Interface, Rashid Zaman, Tanusree Jain, Georges Samara, Dima Jamali

Research outputs 2014 to 2021

Despite ample research on corporate governance (CG) and corporate social responsibility (CSR), there is a lack of consensus on the nature of the relationship between these two concepts and on how this relationship manifests across institutional contexts. Drawing on the national business systems approach, this article systematically reviews 218 research articles published over a 27-year period to map how CG–CSR research has evolved and progressed theoretically and methodologically across different institutional contexts. To shed light on the full gamut of the CG–CSR relationship, we categorize and explore the nature of this relationship along two strands: (a) CSR as a function …

Stakeholderism, Corporate Purpose, And Credible Commitment, Lisa Fairfax

All Faculty Scholarship

One of the most significant recent phenomena in corporate governance is the embrace, by some of the most influential actors in the corporate community, of the view that corporations should be focused on furthering the interests of all corporate stakeholders as well as the broader society. This stakeholder vision of corporate purpose is not new. Instead, it has emerged in cycles throughout corporate law history. However, for much of that history—including recent history—the consensus has been that stakeholderism has not achieved dominance or otherwise significantly influenced corporate behavior. That honor is reserved for the corporate purpose theory that focuses on …

Why Companies Practice Corporate Social Responsibility, Shawn Pope, Alwyn Lim

Research Collection School of Social Sciences

The article discussed why companies practice corporate social responsibility (CSR) and their meta-analysis of 200 surveys over 20 years found that CSR is often embraced as a “halo” strategy.

What Drives Companies To Do Good? A “Universal” Ordering Of Corporate Social Responsibility Motivation, Alwyn Lim, Shawn Pope

Research Collection School of Social Sciences

The classic question of why companies do corporate social responsibility (CSR) is central to much theoretical, regression-based, and experimental research. Guiding research into this question is a tripartite schema of normative, instrumental, and political CSR motivations that has become increasingly established in the CSR literature. This paper challenges the schema’s status as a typology of equally plausible alternatives through an integration and analysis of a worldwide literature of 120 existing academic surveys on CSR motivation. Rather, the paper reformulates the schema into a surveyed ordering of CSR motivations that might be called “universal” in having remarkable stability across time periods, …

Repurposing The Corporation Through Stakeholder Markets, Lynn M. Lopucki

UF Law Faculty Publications

Corporate social responsibility (CSR) is immensely popular. Rhetorically, nearly all public corporations have committed to it. But corporations don’t act responsibly. That is because no system exists by which their responsibility levels can be measured and rewarded or punished. Thousands of organizations worldwide are engaged in a cooperative effort to build such a system. After two decades of work, the system is almost entirely in place. It may become effective in the next two to three years. When it does, the system will continually measure and report publicly as many as a thousand audited data points on the CSR of …

Corporate Social Responsibility And Bond Price At Issuances: Us Evidence, Hong Zhao, Wei Du, Hao Shen, Xinting Zhen

Economics & Finance Faculty Publications

Bondholders are arm's-length lenders with limited insider information. In this paper, we explore whether corporate social responsibility (CSR) activities could work as an information channel for bondholders to better understand the riskiness of bond-issuing firms. We find a significant negative relation between CSR scores and corporate bond yield spread, especially for firms which invest heavily in diversity and community relations, suggesting that CSR firms are less risky. The result is robust to different model specifications and endogeneity issues. In addition, the negative relation between the CSR score and bond yield spread is significant only if a firm has a strong …

The Impacts Of Ethical Philosophy On The Corporate Hypocrisy Perception And Communication Intentions Toward Csr, Kyujin Shim, Jeong-Nam Kim

Research Collection Lee Kong Chian School Of Business

This study investigates how perceptions of corporate hypocrisy from the Corporate Social Responsibility (CSR) activities connect the public’s ethical philosophy to subsequent positive/negative opinion-sharing intention. With special attention to deontology and consequentialism in normative ethics of philosophy, the current study empirically tests a theoretical model of perceived corporate hypocrisy with two causal antecedents (i.e., individual moral philosophy of deontology and consequentialism), and the mediating role of corporate hypocrisy between such antecedents and the publics’ subsequent communication intention (i.e., positive and negative opinion-sharing intentions) toward a firm. Results indicate significant mediation effects of corporate hypocrisy between personal ethical orientations and the …

The Corporate Governance Machine, Dorothy S. Lund, Elizabeth Pollman

All Faculty Scholarship

The conventional view of corporate governance is that it is a neutral set of processes and practices that govern how a company is managed. We demonstrate that this view is profoundly mistaken: in the United States, corporate governance has become a “system” composed of an array of institutional players, with a powerful shareholderist orientation. Our original account of this “corporate governance machine” generates insights about the past, present, and future of corporate governance. As for the past, we show how the concept of corporate governance developed alongside the shareholder primacy movement. This relationship is reflected in the common refrain of …

Caremark And Esg, Perfect Together: A Practical Approach To Implementing An Integrated, Efficient, And Effective Caremark And Eesg Strategy, Leo E. Strine Jr., Kirby M. Smith, Reilly S. Steel

All Faculty Scholarship

With increased calls from investors, legislators, and academics for corporations to consider employee, environmental, social, and governance factors (“EESG”) when making decisions, boards and managers are struggling to situate EESG within their existing reporting and organizational structures. Building on an emerging literature connecting EESG with corporate compliance, this Essay argues that EESG is best understood as an extension of the board’s duty to implement and monitor a compliance program under Caremark. If a company decides to do more than the legal minimum, it will simultaneously satisfy legitimate demands for strong EESG programs and promote compliance with the law. Building …

Stewardship 2021: The Centrality Of Institutional Investor Regulation To Restoring A Fair And Sustainable American Economy, Leo E. Strine Jr.

All Faculty Scholarship

In this essay, which formed the basis for the luncheon keynote speech at the Rethinking Stewardship online conference presented by the Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia Law School and ECGI, the European Corporate Governance Institute, the essential, but not sufficient, role of regulation to promote more effective stewardship by institutional investors is discussed. To frame specific policy recommendations that align the responsibilities of institutional investors with the best interests of their human investors in sustainable wealth creation, environmental responsibility, the respectful treatment of stakeholders, and, in particular, the fair pay and treatment of …

Corporate Social Responsibility And Ceo Risk-Taking Incentives, Zhichuan Li

Business Publications

We examine how firms adjust CEO risk-taking incentives in response to risk environments associated with their corporate social responsibility (CSR) standing. We find strong evidence that as a firm's CSR status improves (declines), increasing (decreasing) its risk-taking capacity, the firm responds by adjusting compensation contracts to increase (decrease) CEO risk-taking incentives (Vega). One channel of the adjustment is through stock option grants. Further analyses indicate that the positive CSR-Vega association is stronger in firms with better corporate governance and in industries where riskiness is more important. Our evidence indicates that firms are not passive in response to changes in CSR …

Foreign Subsidiary Csr As A Buffer Against Parent Firm Reputation Risk, Nan Zhou, Heli Wang

Research Collection Lee Kong Chian School Of Business

This study examines the influence of parent firm reputation risk on the level of corporate social responsibility activities of foreign subsidiaries. We first argue that a strong reputation risk spillover occurs from parent firms to their foreign subsidiaries due to the high visibility of multinationals, the control of parent firms over their subsidiaries, and the liability of foreignness associated with foreign firms in host countries. Then, we argue that subsidiaries may resort to CSR in their host country to reduce the spillover effect. Thus, we hypothesize a positive relationship between parent firm reputation risk and foreign subsidiary CSR activities. Moreover, …

Sustainability In Business: Developing An Undergraduate Business Course, Julie Nelsen, Mary Henderson, Sarah Rand

Business Administration Faculty Scholarship

The purpose of this paper is to discuss the rationale and process of creating a new course focused on business sustainability in the University’s Department of Business Administration. Currently, the University offers just one business sustainability course, delivered once every two years as a January study-abroad course in Chile. While an outstanding experience, a limited number of students can take advantage of the opportunity. After identifying this gap in our business programs, we created a stand-alone course that focuses on business sustainability. This paper addresses the following questions: What is the business case for adding the course? What should the …

Corporate Social Responsibility (Csr) Programs In Philippine Libraries, Joseph Marmol Yap, Martin Julius Villangca Perez, Elijah John Fernando Dar Juan

Library Philosophy and Practice (e-journal)

Libraries are sometimes the least priority of a public school, a state university, a local government unit or an enterprise. With the efforts of its administrators and help of the innovative librarians, these libraries could solicit book donations and other information products, collaterals, library equipment and furniture if they have the right contact person – the CSR managers from the generous donors. More often than not, these libraries try to squeeze in the meager funds they get from their institutions and try to work it out based from their day-to-day needs.

This paper presents 14 organizations / corporations that are …

The Role Of Mutual Funds In Corporate Social Responsibility, Zhichuan Li, Saurin Patel, Srikanth Ramani

Business Publications

This paper examines the role of mutual funds in corporate social responsibility (CSR). Using a fund-level, holdings-based CSR score, we find that CSR-friendly mutual funds improve firms’ CSR standings. This effect is more pronounced for firms with higher mutual fund ownership and stronger corporate governance. We further show that while CSR-friendly mutual funds have influence on almost all CSR categories, they focus on increasing CSR strengths rather than reducing CSR concerns. We also discover that CSR-friendly funds are more likely to vote in favor of CSR proposals, and that firms owned by CSR-friendly funds are more likely to link their …

It’S Who You Know That Counts: Board Connectedness And Csr Performance, Abu S. Amin, Lamia Chourou, Syed Kamal, Mahfuja Malik, Yang Zhao

WCBT Faculty Publications

Highlights:

• We examine whether and how board connections affect the firm's corporate social responsibilities (CSR).
• We find that board connectedness is positively associated with CSR performance.
• Our findings suggest firms that operate in a complex business environment or require more advising benefit more from a well-networked board.
• Firms that are poorly governed, have high stock return volatility, low market capitalization, or low institutional ownership tend to benefit more from the well-connected board when the cost of acquiring information is higher.
• In addition, we show that independent directors’ abilities to gather information and resources from their networks can facilitate the transmission …

Editors' Comments: Is Corporate Social Responsibility Research Undertheorized?, Heli Wang, Cristina Gibson, Udo Zander

Research Collection Lee Kong Chian School Of Business

Corporate social responsibility (CSR) is a concept that has brought about both progress and controversy. Under the banner of CSR, we have made progress in addressing some of the world’s most pressing challenges, yet corporations still struggle to figure out where, how, and when to devote their social efforts, and doubts abound as to whether corporate efforts are truly in the public’s best interest. Scholarly interest in CSR research has also flourished. As a pervasive topic in the business literature, CSR is being addressed not only in the management field but also in the domains of economics, finance, marketing, operations, …

A Learning Curve Of The Market: Chasing Alpha Of Socially Responsible Firms, Zhichuan Li, Jun Wang, Dylan Minor, Chongyu Dang

Business Publications

This paper explores stock market reactions to corporate social performance. We find that a value-weighted portfolio based on the list of “100 Best CSR companies in the world”, published by Reputation Institute, yields statistically significant annual abnormal returns of 1.63% and 1.26%, by controlling for Carhart four factors and Fama-French five factors, respectively (2.39% and 1.84% respectively for an equal-weighted portfolio). Moreover, such abnormal returns decrease as time goes, especially after the inaugural publication of the CSR lists in 2013. The paper also indicates that companies with better social performance are more likely to have positive earnings surprises, and that …

Peer Effects Of Corporate Social Responsibility, Jie Cao, Hao Liang, Xintong Zhan

Research Collection Lee Kong Chian School Of Business

We investigate how firms react to their product-market peers' commitment to and adoption of corporate social responsibility (CSR) using a regression discontinuity design approach. Relying on the passage or failure of CSR proposals by a narrow margin of votes during shareholder meetings, we find the passage of a close-call CSR proposal and its implementation are followed by the adoption of similar CSR practices by peer firms. In addition, peers that have greater difficulty in catching up with the voting firm in CSR experience significantly lower stock returns around the passage, consistent with the notion that the spillover effect of the …

Csr-Contingent Executive Compensation Contracts, Zhichuan Li

Business Publications

Firms have increasingly started tying their executives’ compensation to CSR-related objectives. In this paper, we attempt to understand why firms offer CSR-contingent compensation and the conditions under which such compensation improves corporate social performance. Using hand-collected data from proxy statements, we find that this emerging compensation practice varies significantly across industries and across different CSR categories. Further, well-governed firms are more likely to offer CSR-contingent compensation, and such compensation does lead to higher corporate social standing. Such firms are more likely to offer formula-based, Objective CSR-contingent compensation. However, our results suggest that non-formulaic, Subjective CSR-contingent compensation also helps improve companies’ …

Making Sustainability Disclosure Sustainable, Jill E. Fisch

All Faculty Scholarship

Sustainability is receiving increasing attention from issuers, investors and regulators. The desire to understand issuer sustainability practices and their relationship to economic performance has resulted in a proliferation of sustainability disclosure regimes and standards. The range of approaches to disclosure, however, limit the comparability and reliability of the information disclosed. The Securities & Exchange Commission (SEC) has solicited comment on whether to require expanded sustainability disclosures in issuer’s periodic financial reporting, and investors have communicated broad-based support for such expanded disclosures, but, to date, the SEC has not required general sustainability disclosure.

This Article argues that claims about the relationship …

Text Analytics Approach To Examining Corporate Social Responsibility, Nurul Asyikeen Binte Azhar, Gary Pan, Poh Sun Seow, Andrew Koh, Wan Ying Tay

Research Collection School Of Computing and Information Systems

This research article explores a text analyticsapproach to assess the prominence of corporate social responsibility in 554Singapore-listed firms through a content analysis of the news. Instead ofrelying on publications by the firms, third-party news coverage is used toreduce potential biases due to over-reporting. A dataset of news articles onthe included firms published during fiscal years 2015 and 2016 is crawled, andthe articles’ content is parsed to search for information related to corporatesocial responsibility. Graph theory is subsequently used to create acollaborative network of listed firms’ corporate social responsibilityactivities. The results highlight a more automated and scalable means ofassessing the prominence …

Dare To Be Different? Conformity Versus Differentiation In Corporate Social Activities Of Chinese Firms And Market Responses, Yanlong Zhang, Heli Wang, Xiaoyu Zhou

Research Collection Lee Kong Chian School Of Business

Building on the literature on optimal distinctiveness, this study explores the effects of conformity and differentiation in corporate social responsibility (CSR) practices on the evaluations by security analysts and the responses of the financial market in general. We develop the argument that while conformity in CSR scope enhances analyst coverage, differentiation in CSR emphasis leads to more-favorable analyst recommendations and higher market value. This suggests that firms may be able to simultaneously conform in CSR scope and differentiate in CSR emphasis to achieve optimal distinctiveness. To further enhance our understanding of the variation in the relationship between conformity/differentiation and the …

Stages Of Corporate Sustainability: Integrating The Strong Sustainability Worldview, Nancy E. Landrum

School of Environmental Sustainability: Faculty Publications and Other Works

Businesses are increasingly adopting sustainability, yet the environment continues to decline. This research responds to Dyllick and Muff’s assertion that this paradox is caused by a constricted understanding of the meaning of corporate sustainability, lack of inclusion of constructs from related streams of literature, and failure to integrate micro and macro perspectives of sustainability. The current research addresses these concerns through an integration of 22 microand macro-level models of stages of development from literature in corporate sustainability, corporate social responsibility, environmental management, and sustainable development. This integration results in a new unified model of stages of corporate sustainability that broadens …

Does Persistence Explain Esg Disclosure Decisions?, Garret A. Mcbrayer

Marketing Faculty Publications and Presentations

Advocates of an increased focus on environmental, social, and governance (ESG) initiatives have argued that increased ESG disclosure is a necessary first step. Given the limited regulatory requirements on ESG disclosure, manager preferences serve as a primary determinant of ESG transparency. Using data on ESG disclosure from Bloomberg, I examine the extent to which disclosure persistence on the behalf of firm management, as proxied by managerial tenure, affects firms’ ESG disclosure strategies. Overall, I find that ESG disclosure quality and ESG disclosure variability are reduced as management tenure increases. Further, I find that the replacement of a firm’s CEO interrupts …

The Evolution Of The International Corporate Tax Regime, 1920-2008, Richard Woodward

Books/Book Chapters

No abstract provided.

Reading Between The Lines: Not All Csr Is Good Csr, David K. Ding, Christo Ferreira, Udomsak Wongchoti

Research Collection Lee Kong Chian School Of Business

Purpose: This paper aims to investigate whether corporate social responsibility (CSR), as evidenced in annual financial reports, is associated with a firm’s financial performance in New Zealand. Design/methodology/approach: A word count approach of several key CSR indicators found in the audited financial reports of NZX50 constituent firms is used. Several variables are constructed that measure the presence of CSR within the annual report such as sustainability, responsibility, social, environment, diversity, employee and community, and eight other variables within the annual report that measure the penetration of stakeholder engagement. Control variables and alternative measures of CSR are also included. Descriptive statistics …