Research Briefs

Some boards may be better positioned to navigate complex environmental issues and prioritize the long-term benefits of environmental performance. Firms with larger, more independent boards comprised of directors that have specialized knowledge of potential environmental impacts (CEOs of other companies, lawyers) have better environmental performance.

By keeping a close eye on their supply chains, firms can reduce social and environmental risk and—as a result—deliver better corporate citizenship performance. Incentives and penalties are strong tools that can influence supplier behavior and do so in a way that reduces overall costs for the firm.

When top management teams are comprised of leaders from many different nations and diverse backgrounds, firms experience stronger financial performance.

When differences between disabled employees and their coworkers are not addressed with thoughtfully implemented inclusion programs, employees are less likely to develop quality relationships. The lack of connection negatively affects performance. The findings suggest that organizations and supervisors can mitigate this detrimental effect by fostering a positive climate for inclusion.

Organizations that do an exceptional job at responding to ethical failures are viewed even more favorably by employees who witnessed wrongdoing than organizations that have not stumbled ethically.

First time directors who are racial minorities or women receive lower levels of mentoring, which in turn results in fewer additional board appointments.

A company’s environmental performance affects its financial performance. The market penalizes negative environmental performance—such as high CO2 emissions, and rewards investments in positive environmental performance—such as environmental R&D.

Firms operating in competitive industries (such as tech companies) should invest in corporate citizenship programs to strengthen their reputations and gain insurance against risk while bolstering their bottom line. Firms that frequently engage in competitive actions have better financial performance when they also have good corporate citizenship performance.

Consumers are more likely to change their behaviors as a result of a carbon tax than an equivalent change in the price of gasoline.

Policymakers grant companies with strong social reputations more access and influence. Politicians consider a company’s corporate citizenship activity and positive community relationships—in addition to traditional methods such as political action committee (PAC) contributions and ties to constituents—as signals that the company possesses valuable insight.

When advocating for change, traditional activist groups (nongovernmental organizations, issue advocacy groups) tend to rely on protests and boycotts, which drag companies “through the mud” with media attention. In contrast, religious groups and activist investors rely on lawsuits and proxy votes to seek corporate reform. While the latter method may receive little media attention, it is more likely to foster investor risk perceptions.

A firm’s pollution prevention or reduction efforts can be significantly enhanced by taking advantage of federal and state support. When voluntary programs such as federal matching grants or state efforts such as technical assistance, educational outreach, awards, and grants are utilized, toxic emissions are reduced more than when they are not.