Corporate social responsibility and corporate misconduct

2011 ◽

Vol 41 (164) ◽

Author(s):

Luise Görges ◽

Ulf Kadritzke

Keyword(s):

Corporate Social Responsibility ◽

New Media ◽

Social Responsibility ◽

Social Consequences ◽

Corporate Misconduct ◽

Corporate Power ◽

The Social ◽

History Of ◽

New Social Movement ◽

Corporate Social

Luise Görges, Ulf Kadritzke: Corporate Social Responsibility – from Reputation Managementto the Strategic Advance of Corporate Power. This history of CSR exemplifies theadvancement of corporate power in the process of capitalist globalization. Initially started inresponse to reports on the violation of human rights, the transnational corporations (TNCs)managed to design the CSR concept as a voluntary and highly selective commitment to bridgethe gap between the rhetoric and the reality of corporate conduct. With the worldwide rise ofthe neoliberal paradigm in economic and social policy, these CSR-concepts were combinedinto a capital-dominated CSR-complex. The article tries to reconstruct the scientific, politicaland ideological roots of the concept and the steps transforming the corporate CSR-movementinto a successful ‘industry’. But the company-driven CSR is consistently confronted withactors and actions of a new social movement (including NGOs as well as unions). Theseorganizations of civil society steadily uncover the social consequences of corporate globalstrategies. The so far asymmetric balance of power may nevertheless give NGOs and theirallies– backed by the new media – a chance to lay open corporate misconduct and demonstratethe main ‘performance’ of global corporate power: the deepening of class polarization andecological instability.

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Corporate social responsibility and earnings management of South African companies

South African Journal of Economic and Management Sciences ◽

10.4102/sajems.v21i1.1849 ◽

2018 ◽

Vol 21 (1) ◽

Cited By ~ 5

Author(s):

Lauren A. Jordaan ◽

Marna De Klerk ◽

Charl J. De Villiers

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Earnings Management ◽

South African ◽

Discretionary Accruals ◽

Real Earnings Management ◽

Corporate Misconduct ◽

Responsible Investment ◽

Csr Disclosure ◽

Corporate Social

Background: Enron was considered a strong corporate social performer when their infamous accounting scandal emerged in 2000. Literature suggests that companies use corporate social responsibility (CSR) to disguise corporate misconduct. Aim and Setting: This study examines one type of corporate misconduct, namely, earnings management (EM). Prior studies have found significant associations between CSR performance and EM; however, none of these studies controlled for CSR disclosure. This study unbundles the effects of CSR performance and CSR disclosure on EM. To examine the relationship between CSR performance and CSR disclosures and EM of listed South African companies. Methods: A company included on the Socially Responsible Investment (SRI)1 index is used as an indicator of CSR performance. Four measures of CSR disclosure are used. Results and conclusion: The study tests both CSR performance and CSR disclosure against both real earnings management (REM) and accrual-based earnings management (AEM). CSR performance and earnings management: Companies with better CSR performance were more likely to engage in EM through income increasing discretionary accruals. This suggests that managers who inflate earnings may engage in CSR activities to avoid unwanted scrutiny from stakeholders. Companies with better CSR performance were less likely to engage in REM, suggesting that managers with better CSR performance regard the management of earnings through accruals that reverse in the next period less incriminating than managing earnings through actual company resources. CSR disclosure and earnings management: Companies that integrated their CSR disclosures more into their annual report engaged less in income decreasing discretionary accruals, suggesting that managers with incentives to make more CSR disclosures to reduce information asymmetry will also be less inclined to manage earnings.

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Corporate Social Responsibility and Market-Based Consequences of Adverse Corporate Events: Evidence From Restatement Announcements

Journal of Accounting Auditing & Finance ◽

10.1177/0148558x17725968 ◽

2017 ◽

Vol 35 (2) ◽

pp. 231-262 ◽

Cited By ~ 4

Author(s):

Nader Wans

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Corporate Culture ◽

Ethical Practices ◽

Corporate Misconduct ◽

Market Effects ◽

Corporate Ethical Values ◽

Class Actions ◽

Financial Restatements ◽

Corporate Social

I analyze the informational value of corporate social responsibility (CSR) disclosures in the presence of bad news (i.e., financial restatements). I do so by examining the link between CSR and (a) restatement likelihood and the (b) market-based consequences of restatement announcements. I find that restatements are lower (higher) for firms that are more (less) CSR responsible, consistent with the view that CSR-conscious firms adhere to a corporate culture that promotes ethical practices. In analyzing the market effects of restatements, I find that investors respond less (more) negatively to restatements by firms that exhibit strong (weak) CSR performance. This is consistent with the notion that investors perceive positive CSR performance to be in line with managers’ incentives to promote corporate ethical values than with their incentives to cover up corporate misconduct. In addition, I find that restating firms that are less CSR conscious are more likely to be named as defendants in class actions following restatements. Although I do not find that the likelihood of litigation dismissal is associated with CSR performance, I find that among the cases settled, the amount of settlements is inversely associated with better CSR performance. Collectively, the evidence suggests that firms can effectively use CSR to hedge against potential risk stemming from adverse corporate events.

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