CSR as Reputation Insurance: Primum Non Nocere

By Dylan B. Minor, John Morgan. 2011

633 citations recorded by the source corpus.

An overlooked but important benefit of CSR is to insure a firm against a decline in reputation in the face of adverse events. Through a case study and a multi-year analysis of stock price responses for S&P 500 companies following product recalls, we find that firms that have high CSR ratings fare better than those that do not. Furthermore, a firm that is exceptional in both doing good and avoiding harm suffers virtually no reputational damage following negative media publicity. Using the results of this study, we offer a guide to managers for determining the appropriate amount and mix of CSR activities.

Subfields: Information Systems and Management, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/953597cd46fccd2f3d2e3128aefa6ee4b79e256b

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In Information Systems and Management

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Citations in the corpus

Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of Productivity (2016, background): “As a result, socially desirable CSR participation generates moral capital that provides ‘‘insurance-like’’ Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of… 675 protection (Godfrey 2005; Godfrey et al. 2009; Simon 1995; Minor and Morgan 2011).”
New Evidence on the Role of the Media in Corporate Social Responsibility (2016, neutral): “Wang (2010) and Minor and Morgan (2011) provide additional indirect evidence regarding the effect of media on CSR actions.”
Effects of Corporate Social Responsibility on Corporate Financial Performance: A Competitive-Action Perspective (2018, background): “We also excluded the product quality dimension, which represents a firm’s efforts for extra quality control and product safety (Minor & Morgan, 2011) and potentially shares some similarities with CA.”
Washing Away Your Sins? Corporate Social Responsibility, Corporate Social Irresponsibility, and Firm Performance (2016, background): “Furthermore, Minor (2011) and Minor and Morgan (2011) propose that the primary role of CSR is to increase a firm’s value by insuring the firm against potential losses caused by future CSI.”
Shame on Who? The Effects of Corporate Irresponsibility and Social Performance on Organizational Reputation (2019, neutral): “…and corporate social responsibility perspectives suggest that a good reputation provides organizations with a form of ‘insurance’ that may offset the associated reputational risks of CI (Brammer and Pavelin, 2005; Ducassy, 2013; Godfrey, 2005; Janney and Gove, 2011; Minor and Morgan, 2011).”
Corporate social responsibility and CEO confidence (2017, positive): “Thus, CSR is a way of hedging some of the risks facing the firm (Peloza, 2006; Godfrey et al., 2009 and Minor and Morgan, 2011).”
Environmental policy, environmental performance, and financial distress in China: Do top management team characteristics matter? (2018, methodology): “informed by theoretical insights drawn from neo-institutional (Scott, 2001), upper echelons (Hambrick and Mason, 1984; Hambrick, 2007) and risk management (Godfrey et al., 2009; Minor and Morgan, 2011) theoretical perspectives.”
Formal and Informal Corruption Environments and Multinational Enterprise Social Irresponsibility (2015, neutral): “Firms may even invest in more ‘good’ to compensate for their past or current irresponsibility practices (Kotchen and Moon, 2011) or to act as a type of insurance against future irresponsibility (Godfrey et al., 2009; Minor and Morgan, 2011).”
Corporate Environmental Responsibility and the Cost of Capital: International Evidence (2016, background): “6 Sharfman and Fernando (2008) find a positive relation between environmental performance and the cost of debt, which contradicts their evidence for equity pricing.”