Study: US presidents play surprising role in driving corporate social responsibility

January 03, 2020

A new study by San Francisco State University Assistant Professor of Management Nara Jeong suggests that CEOs look to the White House for leadership on social responsibility -- but not the way you might expect. It turns out that corporate leaders are less likely to act on their values when they're in agreement with the president. And their social responsibility efforts increase when they don't agree with the leadership of the commander in chief.

Jeong studies CEO behavior and corporate social responsibility, which is defined in her latest research -- examining a decade of behavior starting in the mid 1990s -- as actions that "further some social good, beyond the interests of the firm and that which is required by law." She and the study's co-author found that liberal CEOs invest more in socially conscious activities, such as diversity initiatives and environmental conservation, when they feel those values are threatened.

"Republican presidents aren't as interested in those values, so business leaders think, 'We need to do more to promote and protect these values,'"Jeong said.

Conversely, when business leaders shared the same political beliefs as the president, support for socially conscious initiatives dropped. For left-leaning CEOs, who are more likely to engage in socially responsible activities, those efforts fell by an average of 18 percent, Jeong says.

Business leaders with the same political orientation as the president may have an expectation that the government "will deliver on the social values they hold dear," the study reported. As a result, these executives may feel empowered to focus more on their companies' financial performance, Jeong adds.

Jeong and her collaborator went a step further and tested whether politics encouraged companies to act irresponsibly. Examples could include increasing pollution, lowering emission standards or doing away with policies that protect minority employees. Yet Jeong found no evidence that firms engaged in such activities based on whether their politics were aligned or misaligned with the president.

To conduct their study, Jeong looked to Kinder, Lydenberg and Domini (KLD) -- an index that rates the social investments companies make. Categories KLD measures include environment, community involvement, product safety, excessive compensation of executives and diversity. They examined the activities of 752 CEOs between 1994 and 2005.

Next, they turned to the Federal Elections Commission to track the CEOs' political donations over 10 years, a period that covers two presidential elections and several congressional election cycles. This helped them determine the political tendencies of the CEO. They also tracked whether the president was a Democrat or a Republican.

Jeong was surprised by her findings. "You think that the people who are committed to social responsibility will stay committed regardless of the context," she said. "[CEOs] may change their stance if the context changes."

Jeong wrote "The effects of political orientation on corporate social (ir)responsibility" with Lehman College Assistant Professor of Business and Economics Nari Kim. The study appeared in the journal Management Decision in November.

San Francisco State University

Related Social Responsibility Articles from Brightsurf:

'Social cells' related to social behavior identified in the brain
A research team led by Professor TAKUMI Toru of Kobe University's Graduate School of Medicine (also a Senior Visiting Scientist at RIKEN Center for Biosystems Dynamics Research) have identified 'social cells' in the brain that are related to social behavior.

Hackers targeting companies that fake corporate responsibility
A new study found some hackers aren't in it for the money; they want to expose firms that engage in phony philanthropy.

Corporate social responsibility practices often lack 'on the ground' change -- SFU research
Companies that practice corporate social responsibility (CSR) could ensure more positive outcomes by tackling ''real change on the ground'' rather than focusing on single projects and budgets, according to Simon Fraser University political science professor Andy Hira.

Social media influencers could encourage adolescents to follow social distancing guidelines
Public health bodies should consider incentivizing social media influencers to encourage adolescents to follow social distancing guidelines, say researchers.

Firms perceived to fake social responsibility become targets for hackers, study shows
What corporate leaders may not realize is that strides they are making toward social responsibility may be placing a proverbial target on their backs -- if their efforts appear to be disingenuous, according to new research from the University of Notre Dame.

Social grooming factors influencing social media civility on COVID-19
A new study analyzing tweets about COVID-19 found that users with larger social networks tend to use fewer uncivil remarks when they have more positive responses from others.

Social isolation during adolescence drives long-term disruptions in social behavior
Mount Sinai Researchers find social isolation during key developmental windows drives long term changes to activity patterns of neurons involved in initiating social approach in an animal model.

Study: 'Value instantiation' key to luxury brands' and social responsibility
Although luxury brands and social responsibility seem fundamentally inconsistent with each other, the two entities can coexist in the mind of the consumer, provided the brand can find someone -- typically, a celebrity -- who successfully embodies the two conflicting value sets, says new research co-written by Carlos Torelli, a professor of business administration and James F.

Study: US presidents play surprising role in driving corporate social responsibility
A president's political party plays a big role in corporate social responsibility efforts, reveals new research from San Francisco State's Lam Family College of Business.

How to improve corporate social and environmental responsibility
New research led by the University of California, Riverside shows NGOs are more likely to sway companies into ethical behavior with carefully targeted reports that consider a range of factors affecting the companies and industries.

Read More: Social Responsibility News and Social Responsibility Current Events is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to