Do Socially Responsible Firms Walk the Talk?

Some firms claim to be socially responsible. We confront these claims with data based on the most notable recent proclamation, the Business Roundtable’s 2019 “Statement on the Purpose of a Corporation.” The influential Business Roundtable contains many of America’s largest firms; the statement proclaimed a corporation’s purpose as delivering value to all stakeholders, rather than only shareholders. However, we find no evidence that signatories—who voluntarily signed—engaged in such stakeholder-centric practices before or after signing. Relative to peers, signatories violate environmental and labor laws more frequently, have higher carbon emissions, rely more on government subsidies, and are more likely to disagree with proxy recommendations on shareholders’ proposals. We also do not observe postsigning improvements along these dimensions, which suggests that the statement was not a credible commitment to improve. Our results suggest that firms’ proclamations of stakeholder-centric behavior are not backed up by hard data.

Authors

Institutions

Publication Details

Journal
The Journal of Law and Economics
Published
2024-11-01
DOI
https://doi.org/10.1086/728855
Citations
37
Primary Topic
Corporate Social Responsibility Reporting
Type
article
Field-Weighted Citation Impact
16.08
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

Do Socially Responsible Firms Walk the Talk?

Aneesh Raghunandan, Shiva Rajgopal
37 citations
The Journal of Law and Economics
Corporate Social Responsibility Reporting
16.08
article

Do Socially Responsible Firms Walk the Talk?

Aneesh Raghunandan, Shiva Rajgopal
article en
37 citations

Abstract

Some firms claim to be socially responsible. We confront these claims with data based on the most notable recent proclamation, the Business Roundtable’s 2019 “Statement on the Purpose of a Corporation.” The influential Business Roundtable contains many of America’s largest firms; the statement proclaimed a corporation’s purpose as delivering value to all stakeholders, rather than only shareholders. However, we find no evidence that signatories—who voluntarily signed—engaged in such stakeholder-centric practices before or after signing. Relative to peers, signatories violate environmental and labor laws more frequently, have higher carbon emissions, rely more on government subsidies, and are more likely to disagree with proxy recommendations on shareholders’ proposals. We also do not observe postsigning improvements along these dimensions, which suggests that the statement was not a credible commitment to improve. Our results suggest that firms’ proclamations of stakeholder-centric behavior are not backed up by hard data.

The Journal of Law and EconomicsVol. 67(4)
Yale University (US)
Decent work and economic growth
Openalex Percentile: Top 1%
Corporate Social Responsibility Reporting
16.08
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.