Does social responsibility begin at home? The relation between firms’ pension policies and corporate social responsibility (CSR) activities

Anantharaman, D and Gao, F and Manchiraju, H (2022) Does social responsibility begin at home? The relation between firms’ pension policies and corporate social responsibility (CSR) activities. Review of Accounting Studies, 27 (1). pp. 76-121. ISSN 1380-6653

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Abstract

Pension freezes are highly visible corporate actions with the potential to hurt the firms’ reputation as “responsible” employers. We document that firms sponsoring defined-benefit pensions step up CSR engagement following announcements of defined-benefit pension freezes. Freeze firms also increase their usage of CSR-related keywords in public disclosures following the freeze. We find a stronger CSR response to more severe freezes, to more controversial cash-balance conversions, and in larger sponsors. This is consistent with CSR increases being motivated by the need to repair one’s reputation. We also find that CSR increases following an accounting rule change that makes pension deficits more visible. Collectively, our findings highlight an important driver of CSR: the need to restore or manage reputation, especially in the face of corporate actions that can hurt stakeholders.

Affiliation: Indian School of Business
ISB Creiators:
ISB Creators
ORCiD
Manchiraju, H
UNSPECIFIED
Item Type: Article
Uncontrolled Keywords: CSR, Pension Policies, Corporate Social Responsibility
Subjects: Finance
Depositing User: Gurusrinivasan K
Date Deposited: 03 Mar 2022 12:25
Last Modified: 03 Mar 2022 12:25
URI: https://eprints.exchange.isb.edu/id/eprint/1620
Publisher URL: https://doi.org/10.1007/s11142-021-09615-7
Publisher OA policy: https://v2.sherpa.ac.uk/id/publication/16161
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