The ethics of corporate crisis management is a seriously underdeveloped field. Among recent proposals in the area, two contributions stand out: Seeger and Ulmer’s (2001) virtue ethics approach to crisis management ethics and Simola’s (2003) ethics of care. In the first part of the paper, I argue that both contributions are problematic: Seeger and Ulmer focus on top management and propose virtues that lack substance and are in need of further development. Simola’s proposal is also fraught with (...) difficulty, since it seems to conceive of ethics of care as a course of action that can be chosen in a crisis, something which runs contrary to the idea of caring. In the second part of the paper, I argue that Simola and Seeger and Ulmer are nevertheless on the right track, and I propose some directions for further development of the ethics of corporate crisis management. I argue that the value of codes of conduct is limited. Furthermore, I propose a way of identifying relevant virtues for corporate crisis management and discuss a problem that is prevalent in crisis management ethics (the temptation of ad hoc utilitarianism). (shrink)

Despite the importance of ethics in corporate crisis management, they have received limited attention in the academic literature. This article contributes to the evolving conversation on ethics in crisis management by elucidating the ethics of "justice" and "care" and distinguishing between them. Examples of the two approaches are offered through consideration of cases in corporate crisis management, including the alleged glass contamination case faced by Gerber Products Company, and, the shooting tragedy at San Ysidro faced (...) by McDonald''s Corporation. It is argued that both an ethic of justice and an ethic of care can be appropriate approaches in corporate crisis management. Areas for future research are discussed. (shrink)

Within the research framework of pragma-dialectics, this study analysed and assessed strategic manoeuvring by dissociation in corporate crisis communication, exemplified by the 2017 United Airlines’ Passenger Dragging-off Incident. As shown from the analysis of the public statements issued on its official website and Twitter, United Airlines adopted dissociation using the lexical item “volunteer” in the different stages of argumentation: bringing forward a standpoint, maintaining a standpoint and mitigating a standpoint. In so doing, the corporation strategically manoeuvred the topical (...) potential and the presentational devices to meet the demands of its primary audience, i.e. the international general public. Whereas employing dissociation of the notion “volunteer” seemed to be reasonable and served the corporation’s interests best, its argumentative effectiveness was called into question based upon the general rules for critical discussion and the institutional context. (shrink)

This research examines how one’s construal level of a crisis differs by crisis type, and how the interplay of crisis type and apology appeal type impacts the effectiveness of apology messages in a corporate crisis context. Findings indicate that one’s mental construal toward a crisis varies by crisis type, with a self-threatening crisis leading to a lower level of construal than a society-threatening one. Findings further suggest that in a society-threatening crisis (...) condition, an informational apology was more effective than an emotional one. However, in a self-threatening crisis condition, there was no significant difference between two different message types. These findings offer valuable guidelines for developing effective crisis response strategy. (shrink)

Resisting Corporate Corruption teaches business ethics in a manner very different from the philosophical and legal frameworks that dominate graduate schools. The book offers twenty-eight case studies and nine essays that cover a full range of business practice, controls and ethics issues. The essays discuss the nature of sound financial controls, root causes of the Financial Crisis, and the evolving nature of whistleblower protections. The cases are framed to instruct students in early identification of ethics problems and how (...) to work such issues within corporate organizations. They also provide would-be whistleblowers with instruction on the challenges they’d face, plus information on the legal protections, and outside supports available should they embark on that course. Some of the cases illustrate how ‘The Young are the Most Vulnerable,’ i.e. short service employees are most at risk of being sacrificed by an unethical firm. Other cases show the ethical dilemmas facing well-known CEOs and the alternatives they can employ to better combine ethical conduct and sound business strategy. Through these case studies, students should emerge with a practical toolkit that better enables them to follow their moral compass. Finally, the cases provide an in depth look at how a corporation becomes progressively corrupted (Enron), how the Financial Crisis was rooted in ethical decay at institutions as diverse as Countrywide, Goldman Sacks, Citigroup, Fannie Mae and Moody’s, and at the ethical challenges that persist in the post-Crisis, post-Dodd-Frank environment. (shrink)

This short theoretical paper elucidates a plausible theory about the Global Financial Crisis and the role of senior financial corporate directors in that crisis. The paper presents a theory of the Global Financial Crisis which argues that psychopaths working in corporations and in financial corporations, in particular, have had a major part in causing the crisis. This paper is thus a very short theoretical paper but is one that may be very important to the future (...) of capitalism because it discusses significant ways in which Corporate Psychopaths may have acted recently, to the detriment of many. Further research into this theory is called for. (shrink)

Over the past 40 years, scholars and practitioners of public relations have often cast public relations workers in the role of the public relations-person-as-corporate-conscience. This work, however, maintains that this construct is so problematic that invoking it is of negligible use in addressing ethical issues that emerge during a crisis. In fact, a complex crisis, such as the Jahi McMath “brain death” case at Children’s Hospital Oakland, demonstrates the need to abandon the PRPaCC construct to better engage (...) affected stakeholders, including “outsiders” to the organization, who often determine whether an organization is facing a crisis. Through an examination of both the concept of the PRPaCC and the McMath crisis, this work makes the case for moving beyond the PRPaCC construct in favor of a more modest role for the public relations person: facilitating widespread ethical deliberation and discussion throughout an organization, potentially helping the organization alleviate concerns that contribute to crises. (shrink)

Business and Society Review, Volume 127, Issue 1, Page 23-48, Spring 2022.

We analyze the relationship between corporate social responsibility and the stock market performance in the post-global financial crisis period. A new measure of social responsibility by Thomson Reuters, called the ESG Combined Score, is used. As a novel feature of our analysis, socially responsible engagement is divided into the strategic activities closely related to the examined companies’ core business and the remaining secondary activities. The results of the fixed effects regression show a positive and statistically, as well as (...) economically, significant impact of the strategic activities on the corporate stock market performance of companies. This impact is up to 103% higher compared to the secondary activities. The empirical results suggest that if companies aim to increase their share prices via the corporate social responsibility channel, they should strategically select their socially responsible initiatives. (shrink)

This Article discusses why a “corporate governance movement” that commenced in the United States in the 1970s became an entrenched feature of American capitalism and describes how the chronology differed in a potentially crucial way for banks. The Article explains corporate governance’s emergence and staying power by reference to changing market conditions and a deregulation trend that provided executives with unprecedented managerial discretion as the twentieth century drew to a close. With banking the historical pattern paralleled general trends (...) in large measure. Still, while the “imperial” CEO who achieved prominence in the 1980s became outmoded for the most part after corporate scandals at the start of the 2000s, this was not the case with large financial companies. The continued boldness of “star” CEOs in the financial services industry plausibly contributed to the market turmoil of 2008, but the financial crisis emphatically ended the corporate governance “free pass” banks had enjoyed. (shrink)

Corporate social responsibility has grown on the corporate agenda and is at the heart of today’s corporate culture. While much research has examined CSR strategies and effects, the effects of post-crisis CSR communication have received relatively little academic attention. Therefore, this paper uses two experimental studies to examine several key contingency factors that influence consumers’ responses to post-crisis CSR initiatives. Results suggest that consumers demonstrate more favorable responses when a company launches a CSR initiative congruent (...) with the crisis issue, or when the crisis is the result of an accident rather than a transgression. Further, the congruence between the crisis issue and the pre-crisis CSR initiative moderates the consistency effects between pre- and post-crisis initiatives. Such findings should be understood by considering the mediating role of corporate CSR motives’ consumer attributions, which was evidenced in this study. This study theoretically contributes to an improved understanding of the underlying mechanism of the post-crisis CSR information process and managerially contributes to the strategic development of effective post-crisis CSR initiatives given a particular situation. (shrink)

In order to gain greater insight into the nature of corporate social responsibility (CSR) during a time of crisis, the study examines the commitment of firms to continue to engage in CSR activity despite financial pressures to divert their slack resources elsewhere. The setting of the study is CSR activity during the perhaps unprecedented global crisis associated with the COVID-19 pandemic. Based on a qualitative research method approach, both a variety of media sources and the relevant academic (...) literature are reviewed in order to identify examples of CSR activity related specifically to COVID-19. The examples are then categorized and situated according to Professor Archie Carroll’s well-known CSR Pyramid framework describing the economic, legal, ethical, and philanthropic domains of CSR. As such, this study is the first to extend the rich literature stream utilizing Carroll’s CSR Pyramid within the unique context of a global pandemic. (shrink)

This study examines the dimensional consequences of having positive prior corporate associations and negative prior corporate associations in times of product-harm crisis by applying two dimensions of corporate associations. The findings indicate that the disadvantages of having negative prior corporate ability associations are bigger than having negative corporate social responsibility associations in times of product-harm crisis, whereas the advantages of having positive prior CSR associations are bigger than having positive CA associations. This study (...) also provides directions for how to manage reputational strengths and weaknesses prior to a crisis as part of reputation and crisis management. (shrink)

This paper focuses on the set of problems regarding the HIV/AIDS crisis in the specific domain of corporate moral responsibility within a context of the Levinasian notion of proximity (infinite responsibility) and the Third. Against a totalitarian, homogeneous society, Levinas opens the way to a social pluralism, which has its sources in the disquiet provoked by the strangeness of the Other's face. Corporate responsibility, understood from this point of view, would not reduce institutional relations to an anonymous (...) world of neutrality. Corporate responsibility is unconditional in the sense that to be responsible is not a question of choice, but one of deep liberty, the liberty of taking the burden of the infinite responsibility for the Other customers, employees, the public at large and those who suffer in the world. This paper argues that it would then also mean that society (individuals, NGOs and governments) in accordance with the spirit of the Levinasian philosophy of infinite responsibility could exert pressure on corporations, such as pharmaceutical companies. Owing to their power, they could change their present responsibility policies to a more affirmative and engaged responsibility with regard to those who are ill and who suffer death or debilitation from HIV/AIDS and other prevalent diseases in the poorest parts of the world today. (shrink)

Recent research suggests that philanthropy’s value to the firm is largely mediated by contextual factors such as managers’ assumed motives for charity. Our article extends this contingency perspective using a “sensegiving” lens, by which external actors’ interpretations of organizational actions may be influenced by the way in which the organization communicates about those actions. We consider how sensegiving features in philanthropy-related press releases affect whether investors value those donation decisions. For the empirical investigation in this study, we analyze abnormal returns (...) to announcements by U.S. Fortune 500 firms documenting their donations to Hurricane Katrina disaster relief in 2005. We expect that in general, donation decisions would be controversial given the uncertainty surrounding the hurricane’s economic effects at the time. However, we also propose that announcements emphasizing employee involvement in the donation send investors positive signals about the firm’s ability to bounce back from the disaster’s adverse effects. We find empirical support for the proposed hypotheses, and discuss the implications for theory and practice. (shrink)

This paper focuses on the set of problems regarding the HIV/AIDS crisis in the specific domain of corporate moral responsibility within a context of the Levinasian notion of proximity and the Third. Against a totalitarian, homogeneous society, Levinas opens the way to a social pluralism, which has its sources in the disquiet provoked by the strangeness of the Other's face. Corporate responsibility, understood from this point of view, would not reduce institutional relations to an anonymous world of (...) neutrality. Corporate responsibility is unconditional in the sense that to be responsible is not a question of choice, but one of deep liberty, the liberty of taking the burden of the infinite responsibility for the Other – customers, employees, the public at large and those who suffer in the world. This paper argues that it would then also mean that society in accordance with the spirit of the Levinasian philosophy of infinite responsibility could exert pressure on corporations, such as pharmaceutical companies. Owing to their power, they could change their present responsibility policies to a more affirmative and engaged responsibility with regard to those who are ill and who suffer death or debilitation from HIV/AIDS and other prevalent diseases in the poorest parts of the world today. (shrink)

Corporate social responsibility (CSR) has become indispensable in modern business discourse; yet identifying and defining what CSR means is open to contest. Although such contestation is not uncommon with concepts found in the social sciences, for CSR it presents some difficulty for theoretical and empirical analysis, especially with regards to verifying that diverse application of the concept is consistent or concomitant. On the other hand, it seems unfeasible that the diversity of issues addressed under the CSR umbrella would yield (...) to a singular universal definition. Gallie, an eminent philosophical scholar, proposed the essentially contested concepts (ECC) theory in 1956 to address concepts that by their very nature engender perpetual disputes. He pointed out that there are certain concepts which by their very nature are inevitably contested and prescribed seven criteria for evaluating such concepts. This article examines these criteria to discover if CSR is an essentially contested concept and in that case, to construe if such a change in perception will resolve the definitional crisis. The analysis suggests that CSR is an ECC and this explains the potential for several conceptions of CSR, however, it does not totally obviate the need for a definition of its core or common reference point, if only to ensure that the contestants are dealing with an identical subject matter. (shrink)

This Article discusses the impact of the international financial crisis on Brazilian capital markets. While the banking industry was not severely affected, leading nonfinancial corporations experienced severe financial turmoil. Two Brazilian corporations cross-listed in the United States - Sadia S.A. and Aracruz Celulose S.A. - suffered billion-dollar losses when the Brazilian real unexpectedly plummeted in relation to the dollar. Despite earlier disclosure that these companies had engaged only in pure hedging activity, these great losses were found to be the (...) result of their highly speculative trading in currencyderivatives. Consequently, several private lawsuits were filed both in the United States and in Brazil. This Article takes a novel approach to the transnational securities litigation debate by examining the particular consequences of private litigation in a developed and in an emerging country. It compares the types of lawsuits filed and their final outcomes. Despite substantially similar alleged wrongdoing, the outcomes for securities holders in each jurisdiction contrast strikingly. Only U.S. investors of both companies were able to obtain substantial financial recoveries; Brazilian investors obtained none. This Article examines the reasons behind these discrepant results and the consequent economic distributional effects on global securities markets after the U.S. Supreme Court decision in Morrison. The Article argues that Morrison aggravates such shareholder cross-border non pro rata compensation and transfers of company value from foreign to U.S. investors. It identifies a set of costs borne by foreign investors, and so far neglected by scholars, as a consequence of the current status of U.S. and international securities law regimes. These costs are the result not only of the typical “circularity problem” in securities litigation, but also of a “double circularity problem” as they fall on foreign shareholders who also suffered equivalent damages to those experienced by the U.S. class being compensated. The Article then discusses potential policy reforms for fixing transnational securities litigation. (shrink)

Firms tend to seek optimal distinctiveness when choosing CSR engagement timing. Building on the perspectives of optimal distinctiveness and competitive dynamics, this paper explains why firms' CSR engagement timing toward a certain event is affected by dynamic competitive effects. That is, to achieve optimal distinctiveness, focal firms pay more attention to their main competitors that are similar in market, size and resources. We apply a discrete-time survival analysis of 869 Chinese listed firms' CSR engagement action toward the COVID-19 pandemic during (...) the first half of 2020. The results support the mechanism that when a highly similar competitor engages in CSR activities, it raises the probability that the focal firm engages itself beyond levels based solely on its own characteristics and common time-dependent factors. (shrink)

This paper addresses two main issues. First, it develops a systematic mechanism to examine corporate social orientation by contextualizing the researcharound the 2007 global financial crisis and second, it applies this mechanism to compare the CSOs across the U.S., Germany and India. Using a 7-code index of CSO on a sample of financial companies across the three countries, this paper captures the dissolution of loose couplings between corporate private intentions and corporate public pretentions thereby exposing the (...) de-facto CSOs. The results provide evidence of country of origin effects on CSO and capture the dynamic aspect of CSO, not yet shown in previous studies. (shrink)

A global survey of Business Ethics as a field of teaching and research was launched in the second half of 2008. The launch of this survey coincided with the global financial meltdown that was triggered by the subprime crisis in the USA. As part of the global survey of Business Ethics, respondents from nine world regions were requested to provide information on the current focus of research in the field of Business Ethics in their respective countries. They were also (...) asked about the new challenges that they foresee arising over the next 5 years. The timing of the survey makes it possible to determine what the focus of research in the field of Business Ethics was before the start of the global economic crisis, whilst the responses that were given to the survey in response to the question about new challenges in the field of Business Ethics over the next 5 years give an indication of what the new focus areas in Business Ethics research might be after the onset of the global economic crisis. By critically comparing the focus areas of research in Business Ethics prior to the economic crisis to the new areas of research that are foreseen after the onset of the global economic crisis, some insights might be gained on how the global economic crisis is likely to affect the study of capitalism, finance and corporate responsibility in the field of Business Ethics. (shrink)

Since the global financial crisis in 2008, corporations have faced a crisis of trust, with growing sentiment against ‘elites and ‘big business’ and a feeling that ‘something ought to be done’ to re-establish public regard for corporations. Trust and trustworthiness are deeply moral significant. They provide the ‘glue or lubricant’ that begets reciprocity, decreases risk, secures dignity and respect, and safeguards against the subordination of the powerless to the powerful. However, in deciding how to restore trust, it is (...) difficult to determine precisely what should be done, by whom, and who will bear the cost, especially if any action involves a risk to overall market efficiency and corporate profitability. The paper explores whether corporations have a moral duty to be trustworthy, to bear the cost of being so and thus contribute to resolving the current crisis of trust. It also considers where the state and other social actors have strong reason to protect and enforce such moral rights, while acknowledging that other actors have similar obligations to be trustworthy. It outlines five ‘salient factors’ that trigger specific rights to trustworthiness and a concomitant duty on corporations to be trustworthy: market power, subordination (threat and intimidation), the absence of choice, the need to preserve systemic trust, and corporate political power which might undermine a state’s legitimacy. Absent these factors and corporations do not have a general duty to be trustworthy, since a responsible actor in fair market conditions should be able to choose between the costs and benefits of dealing with generally trustworthy corporations. (shrink)

Using a sample of 21,030 US firm-year observations that represents more than 3000 individual firms over the 1998–2012 period, we investigate the relationship between Corporate Social Responsibility (CSR) and investment efficiency. We provide strong and robust evidence that high CSR involvement decreases investment inefficiency and consequently increases investment efficiency. This result is consistent with our expectations that high CSR firms enjoy low information asymmetry and high stakeholder solidarity (stakeholder theory). Moreover, our findings suggest that CSR components that are directly (...) related to firms’ primary stakeholders (e.g. employee relations, product characteristics, environment, and diversity) are more relevant in reducing investment inefficiency compared with those related to secondary stakeholders (e.g. human rights and community involvement). Finally, additional results show that the effect of CSR on investment efficiency is more pronounced during the subprime crisis. Taken together, our results highlight the important role that CSR plays in shaping firms’ investment behaviour and efficiency. (shrink)

This paper posits that differences in corporate governance structure partly result from differences in institutional arrangements linked to business systems. We developed a new international triad of business systems: the Anglo-American, the Communitarian and the Emerging system, building on the frameworks of Choi et al. (British Academy of Management (Kynoch Birmingham) 1996, Management International Review 39, 257–279, 1999). A common factor determining the success of a corporate governance structure is the extent to which it is transparent to market (...) forces. Such transparency is more than pure financial transparency; as it can also be based on factors such as governmental, banking and other types of institutional transparency mechanism. There may also be a choice for firms to adopt voluntary corporate disclosure in situations where mandatory disclosure is not established. The Asian financial crisis of 1997–1999 and the more recent corporate governance scandals such as Enron, Andersen and Worldcom in the United States and Ahold and Parmalat in Europe show that corporate governance and business ethics issues exist throughout the world. As an illustration we focus on Asia’s emerging1 markets, as, both in view of the pressure of globalization and taking into account the institutional arrangements peculiar to the emerging business system, these issues are important there. Particularly for those who have to find an accommodation between the corporate governance structures and disclosure standards of the Emerging system and those of the Anglo-American and Communitarian systems. (shrink)

There is a distinct lack of research into the relationship between corporate governance and corporate social responsibility (CSR) in the banking sector. This paper fills the gap in the literature by examining the impact of corporate governance, with particular reference to the role of board of directors, on the quality of CSR disclosure in US listed banks’ annual reports after the US sub-prime mortgage crisis. Using a sample of large US commercial banks for the period 2009–2011 (...) and controlling for audit committee characteristics, board meeting frequency, and banks’ profitability, size and risk, we find evidence that board independence and board size, the two board characteristics usually associated with the protection of shareholder interests, are positively related to CSR disclosure. This indicates that, with regard to CSR disclosure, more independent boards of directors and larger boards are the internal corporate governance mechanisms which promote both shareholders’ and other stakeholders’ interests. Contrary to our expectations, CEO duality also impacts positively on CSR disclosure. From an agency-theoretical viewpoint, this suggests that powerful CEOs may promote transparency about banks’ CSR activities for their private benefits. While this could indicate that powerful CEOs are under particular pressure to appease stakeholders’ concerns that they might abuse their power by providing a high degree of CSR disclosure, it could also be a sign of managerial risk aversion or managers’ private reputational concerns. (shrink)

This paper contributes to biodiversity and species extinction literature by examining the relationship between corporate accountability in terms of species protection and factors affecting such accountability from forward-thinking companies. We use triangulation of theories, namely deep ecology, legitimacy, and we introduce a new perspective to the stakeholder theory that considers species as a ‘stakeholder’. Using Poisson pseudo-maximum likelihood regression, we examine a sample of 200 Fortune Global companies over 3 years. Our results indicate significant positive relations between ecologically conscious (...) companies that are accountable for the protection of biodiversity and species extinction and external assurance, environmental performance, partnerships with socially responsible organizations and awards for sustainable activities. Our empirical results appear to be robust in controlling for possible endogeneities. Our findings contribute to the discussion on the concern of species loss and habitat destruction in the context of corporate accountability, especially in responding to the sixth mass extinction event and COVID-19 crisis. Our results can also guide the policymakers and stakeholders of the financial market in better decision making. (shrink)

Organisational psychological defences protect the self-esteem and moral integrity of the organisational personality even at the expense of sacrificing the morality of actions. This paper analyses the spectrum of defences used by an oil refinery and its parent company during an oil spill incident. A hypothetical model of defences built on Swajkowski’s four responses to accusations of organisational misconduct – refusals, excuses, justifications and concessions – is tested through this case. On the basis of empirical findings it is obvious that (...) defences delay, impede and interrupt the mitigation and recovery actions of incidents. It is not possible to break the defence behaviour of individuals because it is a built-in psychological mechanism in all humans serving a valuable purpose of dosing the pain of injury. However, it is possible to separate individual and organisational behaviour so that automatic organisational procedures mitigate, recover and, ultimately, prevent incidents. The organisational psychological task of crisis management is to mitigate the organisation’s ego defences, recover from its emotional turmoil and prevent further traumas by making its ego stronger and more flexible. The argument of this paper is that in practice organisational defences act as bumpers against becoming too conscious of the gap between the corporate rhetoric and reality, as subconscious breaks against too fast change demands, and as batteries in their preconscious effort to prepare for the change. Organisational refusals act as bumpers, excuses as breaks and justifications as batteries, while concessions imply that a change towards a more responsible corporation is taking place. (shrink)

Corporate governance has resurfaced as a topic in the ongoing financial crises. This article frames the debate on corporate governance within the ongoing concerns about the corporate role in wider societal governance. It then maps out the context of the six scholarly contributions in this special issue by highlighting how the current debate moves towards a closer integration of governance at corporate and societal level.

Being able to effectively respond in the event a crisis is relevant to an organization's survival. Whether or not an organization is prepared for a potential crisis depends upon senior officials, and other personnel operating within the company. Corporations with established crisis management teams are able to communicate and effectively respond in the event of a crisis. The purpose of this paper is to suggest effective crisis management depends upon several team-related factors that may influence (...) an organization's response and its ethical responsibility. First, the term crisis is defined, followed by an overview of the differences between crisis communication and crisis management. Second, a review of relevant literature regarding teams and effectiveness is examined. Third, several propositions regarding team effectiveness and crisis management are provided. Finally, ethical concerns in regards to the crisis team and the corporation are reviewed. (shrink)

The novel COVID-19 has created an exogenous shock to capital markets and, hence, an ideal opportunity for researchers to assess whether CSR-related activities provide an insurance-like mechanism to protect firms against the shock. Using a large sample of 4361 firms domiciled in 40 countries, we investigate the roles of CSR reporting and assurance in the negative consequences of COVID-19 on firm value. The results confirm that prior CSR reporting experience buffers firms against the adverse effects of the health crisis. (...) The results also support that not only does the assurance on CSR reports create a buffering effect against the health crisis, but it also intensifies the buffering effects of prior CSR reporting experience against the pandemic. Moreover, using difference-in-difference method for testing the link between CSR reporting and firm value, we show that the positive association of reporting and assurance with firm value is more pronounced during the pandemic as compared with the years preceding it. The results of this study are robust to various analyses. Replicating the analyses to the context of the global financial crisis, we find that prior CSR reporting experience and assurance provide similar buffering effects when a market is exposed to various exogenous shocks. The results also hold for the mandatory disclosure regimes. By distinguishing first and subsequent reports and assurance, we show that, unlike subsequent CSR reports and assurance, the initial ones cannot mitigate the negative effects of the crisis on firm value, indicating that stakeholders take into account longer-term CSR reporting experiences. Aside from reporting and assurance aspects of CSR, we analyze the role of CSR report's quality and accuracy and show that the adoption of Global Reporting Initiatives (GRI) frameworks can enhance socially responsible firms' resilience against systematic shocks. (shrink)

Banking scandals, accounting fraud, product recalls, and environmental disasters, their associated reputational effects as well as company response strategies have been well reported in the literature. Reported crises and scandals typically involve one focal company for example BP and the 2010 Deepwater Horizon accident. As business practices change and company supply chains become more complex and interlinked, there is a greater risk of collective crises where multiple companies are associated with the same scandal. We argue that companies are likely to (...) behave differently in a group setting compared to when faced with a crisis individually. Using an inductive approach, we examine the case of the Rana Plaza building collapse. We find that organizations with a history of similar crises adopt defensive strategies and communicate much later compared to organizations which adopt accommodative strategies. Contrary to the individual case, in a collective crisis accommodative strategies result in more negative reputational damage and a higher burden of responsibility. We propose that the relationship between crisis response strategy and organization reputation is moderated by the crisis setting. We extend the logic of crisis management and corporate reputation to incorporate the case of a collective crisis. (shrink)

The present study investigates the interrelationship of corporate governance parameters like board independence and corporate board meetings. The other important control variables like age, leverage, firm's liquidity and size of the firm have been employed to analyse the alliance between corporate governance, vertical agency cost and performance of the firm. The study considers data corresponding to a panel of 76 non-financial firms during 2010-2019 listed in the National Stock Exchange, India. The study tries to empirically evaluate the (...) association between corporate governance parameters and performance of the firm. By selecting the static panel data regression, researchers found no significant impact of corporate board meeting and board independence on firm performance. The study also documents a positive and significant relationship between board independence and asset utilisation ratio. Further, corporate board meetings have a negative relationship with vertical agency crisis. (shrink)

This study investigates whether and how the intensity of social distancing from the Coronavirus disease 2019 (COVID-19) pandemic influences the corporate social responsibility (CSR) disclosure index. An empirical examination is carried out based on data from the Shanghai Stock Exchange from 2020 to 2022. CSR disclosure index is measured by the percentage of CSR-related press releases from the total press releases published on a certain day. The intensity of the COVID-19 pandemic is measured by the daily confirmed cases among (...) the population in China. This research uses the two-stage least squares regression model to alleviate the endogeneity issues. Findings reveal a reverse correlation between the intensity of the COVID-19 pandemic and the CSR disclosure. The results are consistent and robust to endogeneity tests and sensitivity analyses. Findings support the stakeholder–agency theory and indicate that Chinese managers tend to satisfy the shareholders' interests rather than those of other broad stakeholders. Moreover, Chinese managers tend to choose short-term survival rather than long-term development in times of social distancing. (shrink)

This study investigates the relationship between corporate governance and corporate sustainability performance in the emerging Asian markets where the central role of sustainable development was perceived after the 2008 global financial crisis. We base our study on the triple bottom line approach that incorporates three dimensions of sustainability: economic, environmental, and social performance. A governance index comprising ten firm-specific provisions is proposed to summarise internal corporate governance. Consistent with agency theory, we confirm that firms with better (...) corporate governance have better corporate sustainability performance. We also determine which main factors drive the governance-sustainability relation. The findings have practical implications for firms, shareholders, and policy makers by emphasising the role of corporate governance in assessing and enhancing corporate sustainability performance. (shrink)

Strategic leadership and corporate sustainability have recently come together in conspicuously explicit fashion through the emergence of top management team positions with dedicated corporate sustainability responsibilities. These TMT positions, commonly referred to as “Chief Sustainability Officers,” have found their way into the upper echelons of many of the world’s largest corporations alongside more traditional TMT positions including the CEO and CFO. We explore this phenomenon and consider the following two questions: Why are corporate sustainability positions being installed (...) to the TMT?What effects do corporate sustainability TMT positions have at their organizations? We consider these questions through strategic leadership and neoinstitutional theoretical frameworks. Through the latter, we also engage with Weberian considerations of bureaucracy. We find that the reasons why corporate sustainability TMT positions are installed can be in response to a crisis at the corporation for which its legitimacy is challenged. We also find the corporate sustainability TMT position can be installed proactively in an effort to realize external opportunities that may have otherwise gone unrealized without concerted attention and coordination afforded by a strategic level position. Regarding effects, we determine the position can relate to the establishment of bureaucratic structures dedicated to corporate sustainability within the corporation through which formalized processes and key performance indicators to drive corporate sustainability performances are established. In the face of our finding that many corporate sustainability TMT positions are being removed despite having only relatively recently been introduced to their respective TMTs, we find that the successful implementation of bureaucratic machinery can help considerations to sustainability extend beyond the tenure of a corporate sustainability position within the TMT. (shrink)

Corporate Reputation (CR) has become an increasingly important topic in the social responsibility literature. In this exploratory study we relate reputation to crisis management by implementing an experimental survey in which respondents indicate how strongly they feel about a potential crisis. Findings reported here indicate that respondents’ reactions to the potential crisis varied according to the industry in which the firm operated.

Using an international setting consisting of 5410 corporations domiciled in 24 countries, we test the insurance-like effect of corporate social responsibility (CSR) performance in the era of the pandemic and confirm that CSR performance increases socially responsible companies’ resilience against the adverse effects of the crisis. Comparing stakeholders' responses to CSR activities during the pandemic and normal periods, we observe that the link between CSR performance and firm value is stronger during the crisis period. We also realize (...) that the social aspect of CSR performance is the main driver for the mentioned effects. Finally, comparing the resilience of highly committed socially responsible companies with those with moderate and very low CSR ratings, we observe that best-in-class companies enjoy the greatest buffering effects, implying that the insurance-like effect of CSR performance is non-linear against systematic crises. Findings are robust to ceremonial CSR activities, extreme values of market-based instruments, endogeneity concern, etc. (shrink)

Being able to effectively respond in the event a crisis is relevant to an organization''s survival. Whether or not an organization is prepared for a potential crisis depends upon senior officials, and other personnel operating within the company. Corporations with established crisis management teams are able to communicate and effectively respond in the event of a crisis. The purpose of this paper is to suggest effective crisis management depends upon several team-related factors that may influence (...) an organization''s response and its ethical responsibility. First, the term crisis is defined, followed by an overview of the differences between crisis communication and crisis management. Second, a review of relevant literature regarding teams and effectiveness is examined. Third, several propositions regarding team effectiveness and crisis management are provided. Finally, ethical concerns in regards to the crisis team and the corporation are reviewed. (shrink)

Corporate governance has come to be recognised as a cornerstone of economic reforms seeking to promote stability and growth in developing countries. The Asian crisis of the 1997 was viewed as having roots in poor governance and hence national governments as well as international organisations have sought to promote a strengthening of governance mechanisms. This article investigates governance reforms in India over the last decade. The paper reviews changes in Indian governance codes that indicate a preference of adoption (...) of Anglo-American governance models. A survey of ownership structures of Indian listed companies reveals a mixture of governance mechanisms and a persistence of the "business house model" of governance. The paper concludes that despite external pressures towards an "Anglo-Americanisation" of governance practice, the outcomes thus far reveal the emergence of a diversity of governance mechanisms arising in a path-dependent fashion. (shrink)

The moral value of health : health as a basic human need -- The human right to health and its corresponding responsibilities -- States and natural persons as subjects of justice -- Pharmaceutical transnational corporations as subjects of justice -- The global health governance of the global health crisis.

Conventional management strategies for anti-corporate anger involve its negative construal as an inappropriate irrationality in need of containment. An alternative account is offered in which such anger comprises a healthy and health-sustaining component of care-based moral agency directed not only toward the affiliative advancement of connection among community members, but also toward the (political) resistance to violation, injustice, and carelessness through which disconnection from responsive community relationships occurs. The role of anger in care-based moral agency is demonstrated through discussion (...) of the classic case of environmental and human health crisis at Love Canal, New York. (shrink)

In the wake of the most recent financial crisis, corporations have been criticized as being self-interested and unmindful of their relationship to society. Indeed, the blame is sometimes placed on the corporate legal form, which can exacerbate the tension between duties to shareholders and interests of stakeholders. In comparison, the Benefit Corporation (BC) is a new legal business entity that is obligated to pursue public benefit in addition to the responsibility to return profits to shareholders. It is legally (...) a for-profit, socially obligated, corporate form of business, with all the traditional corporate characteristics combined with societal responsibilities. Considering the history and perception of shareholder primacy in United States law, it is argued that this new business structure is an ethical step toward empowering socially committed commercial entities. The contribution of this research is to provide a fundamental base of knowledge about the new legal form of business, the BC, upon which further study may rely. First, the legal history of the corporation is briefly reviewed in order to provide context to the relationship of the corporate form to society, including exploration of the premise that shareholder wealth maximization is its best and only purpose. Second, the BC is described in detail, and state statutes are compared. Third, the BC is placed within the context of corporate social responsibility. Finally, opportunities for future research are discussed. (shrink)

Since the mid‐1990s we have witnessed the rise of numerous constructive and positive activities aimed at developing or enhancing corporate responsibility and corporate citizenship as well as anti‐globalization and anticorporate activism. And, of course, in 2008, we witnessed the meltdown of financial markets and numerous financial institutions as well as some major companies teetering on the brink of collapse. What is actually needed to create the world that many people want to live in may in fact be a (...) new relationship between business and society, that is, new ways of looking at the corporation and its role in society, both in practice and in management education? We will argue that some initiatives, such as Corporation 2020, have already begun to explore these issues by taking a more holistic perspective on different purposes and roles of the corporation in the future. Management education, which has been severely criticized in the aftermath of the economic crisis, has an important role to play, but in a changed form. Implications for leadership and management education include the need to shift cognitive, moral, and emotional levels of development, renewed emphasis on balance both individually and socially, a less is more sensibility, a holistic systems perspective, and shifting the purpose of the firm to encompass not just shareholder needs, but also societal, stakeholder, and ecological needs and interests. In this article we explore some of the ways in which these attributes might be engendered in future leaders, at least in those management development and education programs interested in fostering a new wave of progressive leadership in management for the future. (shrink)

Leading a corporation through a crisis requires rational decision making guided by an ethical approach (Snyder et al., Journal of Business Ethics, 63, 2006, 371). Three such approaches are virtue ethics (Seeger and Ulmer, Journal of Business Ethics, 31, 2001, 369), an ethic of justice, and an ethic of care (Simóla, Journal of Business Ethics, 46, 2003, 351). In this article, I consider the effectiveness of these approaches for leading a corporation after a crisis. The standard I use (...) is drawn from recent studies that examine how people tend to react to corporate unintentional harms. I conclude from these studies that an ethic of care approach is most effective for managing corporate crises when it comes to stakeholder concerns. I conclude the article with strategies for managing a crisis using an ethic of care. (shrink)

ExcerptDrawing on the quasi-legal human experimentation programs designed and implemented by the CIA between the 1950s and 1970s, the television series Severance envisions the possible corporate uses of brainwashing and mind control. The narrative centers on employees of a technology company, Lumon Industries, who agree to undergo a medical procedure (“severance”) that separates non-work memories from work memories by implanting a microchip into the brain. Unfolding like a science fiction psychological thriller, the narration falls somewhere between omniscient and restricted. (...) Viewers at the outset know only slightly more about the non-work lives and histories of the characters than the characters’ work-day versions, while the gradual increase of viewer knowledge parallels that of the characters’ paths toward self-discovery. (shrink)

In recent years, there have been several high-profile recalls of hybrid products. If consumers perceive a global firm to be responsible for the recall, then it will reduce their brand equity. Therefore, global firms may respond in ethically questionable ways to justify themselves to important stakeholders and avoid blame. Understanding how stakeholders attribute blame for crises involving hybrid products is important to shed light on the unethical manner in which global firms might avoid blame in such situations. The research reported (...) here shows that in a hybrid product crisis, consumers show a bias in favor of the brand company and against the manufacturing company. This bias is more pronounced when the country of manufacture has an unfavorable image or when consumers lack familiarity with the recalled brand. Ambiguous recall announcements by companies that fail to provide a specific and clear reason for the product defect prompt consumers to assume that a manufacturing flaw caused the product defect. As a result, consumers reduce their attribution of blame for the brand company, and thus its brand equity is maintained. (shrink)