Doing Well by Reporting Good: Reporting Corporate Responsibility and Corporate Performance

This article aimed to examine the impacts of reporting‐type corporate responsibility activities (CRA‐R) on corporate social and financial performance. Academic research has explored how varying attributes of markets, industry sectors and firms might shape corporate social and financial performance, but includes little effort to examine the impacts of different kinds of CRA on corporate performance. We build on debate about the value of firms' reporting activities related to corporate responsibility. Recent literature suggests that CRA‐R is superficial marketing or “greenwashing.” Despite this viewpoint, corporate reporting activities related to responsibility are rising. In order to solve this puzzle, this article explores the impact of CRA‐R on corporate performance. First, drawing from the institutional perspective, we propose that CRA‐R will positively impact corporate social performance (CSP) oriented toward secondary stakeholders. Second, combining the stakeholder–agency perspective and corporate responsibility literature, we motivate the hypotheses that CRA‐R positively influences corporate financial performance (CFP). Empirical testing with a unique dataset of large US corporations selected in the Fortune 500 support the proposed hypotheses. In particular, both corporate social responsibility and Global Reporting Initiative (GRI) activities positively influence corporate environmental performance, and financial performance. In particular, GRI reporting is a strong indicator to impact both social and financial performance. Our findings indicate that CRA‐R should not simply reflect shallow motivations, but deliver value to noninvestor stakeholders as well as investors.     

Exploring the drivers of corporate reputation integrated with a corporate responsibility perspective: some reflections in theory and in praxis

Corporate reputation is a multi-stakeholder concept that is reflected in the perceptions that stakeholders have of an organization. There is much evidence that reputation interacts diversely with different stakeholder groups and in relation to other concepts such as corporate responsibility. In this paper, we propose the implementation of the reputational quotient on a sample of Italian SMEs and attempt to discover and measure the relationship with corporate responsibility. Thus concluding that the instruments used for measuring and managing reputation can also be usefully employed in terms of corporate responsibility.     

Exploring the Impact of Social Axioms on Firm Reputation: A Stakeholder Perspective

This study proposes a model of how deeply held beliefs, known as ‘social axioms, moderate the interaction between reputation, its causes and consequences with stakeholders. It contributes to the stakeholder relational field of reputation theory by explaining why the same organizational stimuli lead to different individual stakeholder responses. The study provides a shift in reputation research from organizational‐level stimuli as the root causes of stakeholder responses to exploring the interaction between individual beliefs and organizational stimuli in determining reputational consequences. Building on a conceptual model that incorporates product/service quality and social responsibility as key reputational dimensions, the authors test empirically for moderating influences, in the form of social axioms, between reputation‐related antecedents and consequences, using component‐based structural equation modelling (n = 204). In several model paths, significant differences are found between responses of individuals identified as either high or low on social cynicism, fate control and religiosity. The results suggest that stakeholder responses to reputation‐related stimuli can be systematically predicted as a function of the interactions between the deeply held beliefs of individuals and these stimuli. The authors offer recommendations on how strategic reputation management can be approached within and across stakeholder groups at a time when firms grapple with effective management of diverse stakeholder expectations.     

Drivers of Corporate Social Responsibility: the Role of Formal Strategic Planning and Firm Culture

Scholars have paid considerable attention to studying the relationship between corporate social responsibility (CSR) and firm performance. Yet, little empirical research demonstrates what actually shapes or drives CSR. This paper builds a case that formal strategic planning is one such driver in that it creates awareness of and formulates responses to stakeholder demands for CSR. However, exploring single variable relationships is problematic, as other important endogenous factors need to be considered in explaining CSR. Specifically, firm culture is identified as influencing a firm's orientation towards the responsible treatment of stakeholders. One such cultural factor, humanistic culture, is argued to have a positive effect on CSR. By studying a sample of heterogeneous firms in Australia, results demonstrate that a formal strategic planning effort is positively linked to CSR. Further, a humanistic culture positively impacts CSR, after accounting for a firm's formal planning efforts.     

Sustaining the Financial Value of Global CSR: Reconciling Corporate and Stakeholder Interests in a Less Regulated Environment

In this article we examine the association between corporate social responsibility (CSR) and firm value. This line of research is important since firms continue to invest in CSR even though past studies reveal a limited linkage between financial value and CSR. However, the business case for CSR or “doing good while making a profit,” appears to be advancing within the business ethics literature as a preferred conception of CSR. We conjecture that the greater unification and refinement of both profit maximization and stakeholder interests through corporate acts, not statements alone, will sustain the financial value of CSR in a less regulated global business environment. We study the triangle of what companies say, what companies do, and firm financial performance. We analyze Fortune 250 firms and find a positive association between what companies do based on KLD Research and Analytics, Inc. (KLD) ratings, and what companies state about ethics in their CSR statements. We then employ regression analysis and find that companies’ socially responsible acts are positively associated with overall firm value and financial performance. Yet we do not find a statistically significant association between what companies say regarding ethics in their CSR statements and their financial outcomes. These results suggest that firm value and financial performance is associated with what companies do and not what they say. Our results seem to be driven by multinational corporations (MNCs) and not by non‐MNCs. This is possibly because MNCs generally operate in a less regulated global business environment that often necessitates strong ethical corporate leadership to further stakeholder interests. Overall, these results help reconcile corporate and stakeholder objectives since evidence of a link between financial performance and doing good sustains global CSR.     

Corporate social responsibility as a source of employee satisfaction

Corporate social responsibility has received an increasing amount of attention from practitioners and scholars alike in recent years. However, very little is known about whether or how corporate social responsibility affects employees. Because employees are primary stakeholders who directly contribute to the success of the company, understanding employee reactions to corporate social responsibility may help answer lingering questions about the potential effects of corporate social responsibility on firms as well as illuminate some of the processes responsible for them. To begin our chapter, we provide a brief history of scholarship on corporate social responsibility and highlight some of the major challenges researchers in this area currently face. We then discuss why corporate social responsibility may represent a special opportunity to influence employees’ general impression of their company. Next, we identify four distinct paths through which corporate social responsibility may affect employees’ relationship with their company that correspond to four universal psychological needs: security, self-esteem, belongingness, and a meaningful existence. Finally, we offer an agenda for micro-level research on corporate social responsibility.     

基于“Meta分析”视角的企业社会绩效与企业财务绩效之间的关系研究

随着企业社会责任理论体系逐步的发展与完善,国内外学者开始关注企业社会绩效(CSP)与企业财务绩效(CFP)之间的关系,但是其中大量有关的研究结果却是互相矛盾的。本研究首先提出了一个理论模型以及相关研究假设,以国内外有关的实证研究文献作为研究对象,采用Meta分析方法对各项独立研究结果进行综合统计分析。其研究结果表明:企业社会绩效常常与企业财务绩效是直接地相互作用和相互影响的;企业管理能力和企业声誉作为中介变量对CSP与CFP关系有着正向的影响,其中企业声誉有着高度的影响;大多数CSP测量方法与CFP测量方法之间有着显著的正向关系,其中CSP声誉排名测量方法与CFP测量方法之间显示出相当高的正向关系,而以市场基础和会计基础CFP测量方法与CSP测量方法之间的关系要低于感知(调查)CFP测量方法的。最后,将其研究结果与相关文献的研究结果进行了比较,并提出了研究结论和相关启示。     

Taking (and Sharing Power): How Boards of Directors Can Bring About Greater Fairness for Dependent Stakeholders

One of the ways in which scholars have sought to broaden the discussion of the social responsibilities of corporations and their managers is through the development of the stakeholder concept. The primacy of shareholder interests in corporate‐governance processes and managerial action is, however, a myth that justifies all sorts of managerial self‐interest seeking and exploitation of particular stakeholder groups. What makes this myth particularly problematic—from the standpoint of fairness and corporate governance—is that not all nonshareholder stakeholders are equally situated with regard to their ability to secure fair treatment. In this article, I explore the ethical dimensions of board responsibilities to dependent stakeholder groups by first describing the differences between shareholders and nonshareholder stakeholders with regard to risk, examining why dependent stakeholders (stakeholders with legitimate and urgent claims, but no power) are particularly important from the standpoint of stakeholder risk, and discussing how stakeholder consultation might provide a partial fix to such problems. I will conclude with proposals for how boards can more faithfully discharge their ethical responsibilities to dependent stakeholder groups, and in so doing facilitate stakeholder involvement in corporate governance in ways that promote fairness in organization–stakeholder relationships.     

Beyond Transparency: Information Overload and a Model for Intelligibility

The role and evaluation of the modern corporation is being challenged by multiple stakeholders, changing markets and public expectations. Unfortunately, corporate governance, regulation and accounting have played a prominent role in business failure for the past decade resulting in a growing lack of public confidence in our markets. We present a new model that contributes to improving the quality of corporate information by providing not more, but better information through increased intelligibility of overall information, benefiting both the firm and its broad array of stakeholders. It has become apparent that boards, management and regulators have been unable to cope with the rise of business failures by adding increasing layers of regulation that have often served only to exacerbate the complexity and further cloud the transparency of needed information. We have identified a growing number of forward‐thinking firms that have found alternative means to provide betterinformation and strengthen their companies. We offer a stakeholder‐centric model for improving information intelligibility based upon the extensive scope and variety of external input derived from the growing social movement organizations. With the added focus on intelligibility, these groups can help foster greater corporate responsibility, meaningful transparency, increased stakeholder benefits, and improved overall performance of the firm.     

Rethinking the Corporate Financial–Social Performance Relationship: Examining the Complex,Multistakeholder Notion of Corporate Social Performance

The corporate financial performance (CFP)–corporate social performance (CSP) relationship has been investigated many times over the past few decades, yet the notion of CSP has generally been understood to be a single, monolithic aspect of corporate strategy. This article examines the common CFP–CSP understanding in three distinct ways: (1) by extending the evaluation of CSP as a complex, multistakeholder notion; (2) by analyzing CSP's relationship with the firm's financial performance at a given point in time as a lead (independent) variable in the relationship and as a lag (dependent) variable in the relationship; and (3) for both positive and negative stakeholder relationships. The results indicate that the employee emerges as the stakeholder group most strongly linked to CFP, followed by the consumer stakeholder. The natural environment and the community stakeholder group are minimally associated with CFP. General support is found for a CFP–CSP relationship at a given point in time, with some support found for CSP as a lead (independent) variable. When used as a measure of financial performance, return on assets is more often correlated with CSP than is return on equity. These results and their implications are discussed.     

When Boards Matter: The Case of Corporate Social Irresponsibility

While academic research has made remarkable progress in understanding corporate social responsibility (CSR), we have scant understanding of corporate social irresponsibility (CSiR). This paper adopts a stakeholder‐agency perspective towards CSiR to ask two related questions: (1) What board‐level structures can monitor management to reduce CSiR? and (2) What are the conditions that render board monitoring more effective? Employing a unique objective measure of CSiR and a sophisticated system generalized method of moments with dynamic panel model on a sample of publicly listed firms in the USA between 2002 and 2015, this paper demonstrates how firms with a specific board‐level governance bundle (i.e. a large, more independent board, with a board CSR committee, a higher proportion of women within boards with frequent director activity) are better equipped to reduce irresponsible behaviours, both in terms of number of irresponsible incidents as well as in terms of their economic costs to the firm. Moreover, the effectiveness of this governance bundle sustains under conditions of high institutional ownership and high board remuneration. This paper has implications for CSR and corporate governance literatures, as well as for managers and policymakers.     

The Dark Side of Stakeholder Reactions to Corporate Social Responsibility: Tensions and Micro‐level Undesirable Outcomes

With a review of literature on corporate social responsibility (CSR) and its micro‐level impacts, this paper proposes an integrative framework to map undesirable relational outcomes of CSR activities on internal (employees) and external (customers) stakeholders. By adopting a paradox‐based perspective, the authors determine that unexpected, adverse stakeholder reactions to CSR are driven primarily by either performing or belonging tensions, related to exchange‐ and identity‐based stakeholder concerns, respectively. Specifically, contextual and personal influences can trigger and explain undesirable relational outcomes of CSR. On this basis, this paper offers a research agenda for developing a more refined understanding of CSR‐related tensions and a more nuanced perspective on the business case for CSR.     

The Meaning and Meaningfulness of Corporate Social Initiatives

In response to pressures to be more “socially responsible,” corporations are becoming more active in global communities through direct involvement in social initiatives. Critics, however, question the sincerity of these activities and argue that firms are simply attempting to stave off stakeholder pressures without providing a corresponding benefit to society. By drawing on institutional theory and resource dependence theory, we consider what factors influence the adoption of a “meaningful” social initiative—an initiative that is sustainable and has the potential for a significant positive impact on society—as opposed to a symbolic initiative. In addition, we raise the question of how social initiatives—both meaningful and symbolic—participate in the “institutional war” over the meaning of corporate social responsibility.     

The Impact of Corporate Reputation on Firm Risk: A Panel Data Analysis of Spanish Quoted Firms

Researchers have traditionally addressed the influence of corporate reputation on firm performance, but have not considered the influence of corporate reputation on firm risk. This research develops hypotheses regarding the opposing influence of corporate reputation on a firm's systematic risk, unsystematic risk and total risk, as well as the moderation effect of firm size and industry concentration. Using a panel data method, these relationships are analysed, controlling for the effects of endogeneity, for a sample of Spanish quoted firms in the period 2001–2007. Specifically, two complementary analyses are performed. The first distinguishes firms included and not included in the MERCO index of the most reputable firms. The second analyses the impact of corporate reputation for the sub‐sample of most reputable firms. Being reputable reduces a firm's unsystematic risk and total risk, but increases systematic risk. In addition, firm size weakens these influences of corporate reputation on firm risk. However, among the most reputable firms, differences in reputation score have a lower effect on risk. Specifically, the corporate reputation level only influences firm unsystematic risk. It seems that what matters is not the degree of corporate reputation, but whether being or not being reputable is the question in terms of risk.     

Maximizing Business Returns to Corporate Social Responsibility (CSR): The Role of CSR Communication

By engaging in corporate social responsibility (CSR) activities, companies can not only generate favorable stakeholder attitudes and better support behaviors (e.g. purchase, seeking employment, investing in the company), but also, over the long run, build corporate image, strengthen stakeholder–company relationships, and enhance stakeholders' advocacy behaviors. However, stakeholders' low awareness of and unfavorable attributions towards companies' CSR activities remain critical impediments in companies' attempts to maximize business benefits from their CSR activities, highlighting a need for companies to communicate CSR more effectively to stakeholders. In light of these challenges, a conceptual framework of CSR communication is presented and its different aspects are analyzed, from message content and communication channels to company- and stakeholder-specific factors that influence the effectiveness of CSR communication.     

Corporate Reputation: Do Board Characteristics Matter?

Our study draws on institutional and signalling theories to postulate relationships between board characteristics and corporate reputation. Based on a sample of 324 firms featured in Fortune's list of most admired corporations in the USA, our findings indicate that board characteristics significantly influence the assessment of firm reputation by the business community. Specifically, we found that firms with a greater proportion of outside directors and those with larger boards exhibited better reputation than those with smaller boards and a higher proportion of insiders. In addition, we observed an inverted‐U relationship between the average tenure of outside directors and corporate reputation. However, contrary to expectations, our findings indicate a negative association between independent leadership structure (i.e. absence of duality) and corporate reputation.     

Managing stakeholder pressures: Toward a typology of corporate social performance profiles

Why do some firms ignore some stakeholders while courting others? We propose two key drivers of firms' social postures and derive from this analysis a novel typology of corporate social performance (CSP) profiles. Although we expect that other drivers exist, we argue that a useful starting point for understanding any given CSP profile is to consider the pressure exerted on an organization by its stakeholders in conjunction with its level of resource endowment. Our preliminary typology identifies six distinct CSP profiles that reflect different opportunities and risks for stakeholder management: the CSP Vanguard, Opportunist, Generalist, Minimalist, Specialist, and Laggard. All else equal, the first two CSP profiles imply more nonmarket opportunities than risk, whereas we expect Laggards and Specialists to face greater risk in their responses to social and environmental issues. According to our framework, Generalists and Minimalists probably operate between these two extremes of business risk. Our conceptual analysis seeks to advance research and practice for more strategic stakeholder management.     

The Relation between Accounting Conservatism and Corporate Social Performance: An Empirical Investigation

Accounting conservatism and corporate social responsibility have received much attention in the recent literature. The current study draws upon Watts, who recognizes that one role of conservatism is to reduce the likelihood of excess wealth transfers to its stakeholder groups and Post et al., who assert that a key aspect of positive corporate social performance is the (equitable) distribution of corporate wealth. Accordingly, this study empirically investigates and finds a positive relation between conservatism and strong social performance.     

Discourses about Righting the Business ← → Society Relationship

This article engages the question—what is the right business‐society relationship? We consider three perspectives that seek to address the relationship: corporate social responsibility (CSR), social entrepreneurship (SE), and conscious capitalism (CC). We take a macroapproach considering how commentary about these approaches establishes a direction for corporate practice and its relationship to key stakeholder groups. We argue that these perspectives are ‘D'iscourses that provide arguments for and articulations about the direction of corporate practice and the business‐society relationship. To organize our review of each perspective, and focus our critique, for each we highlight (a) drivers and influencers, (b) core assumptions and defining features, and (c) approaches and exemplars. Although distinct, all emphasize effective business practices as key to meeting social needs. CSR suggests legitimizing business practice; SE relocates business practices; and CC seeks to reimagine/rehabilitate business for social good. Ultimately, we conclude that these Discourses lack a clear communicative focus in terms of decision making within these organizations. We attend to this and other implications, and offer avenues for further research.     

Corporate Social Responsibility Reporting as Substantive and Symbolic Behavior: A Multilevel Theoretical Analysis

This article describes a multilevel theoretical framework that examines the multiple causes of corporate social responsibility (CSR) reporting in the social environment of business. We argue that substantive and/or symbolic reporting flows from individual‐, aggregate‐, organizational‐, and institution‐level phenomena, and is thus a complex outcome of CSR and corporate social performance (CSP). Theoretical lenses range from reinforcement theory at the microlevel to legitimacy and stakeholder theories at the macrolevel, and include a discussion of the emergence of lower‐level CSR‐relevant characteristics to higher level constructs. Our goal is to clarify how this behavior develops from microlevel, mesolevel, and macrolevel processes with a view toward assisting corporations to better enact CSR reporting, and their stakeholders to effectively promote substantive reporting behavior.