Many CEOs engage in activism by publicly expressing their views on social, environmental, and political issues, while other CEOs refrain from doing so-a behavior we term CEO inactivism. We use two experiments to examine how CEO (in)activism impacts investor decisions. Our results are consistent with our theoretical predictions. When a CEO expresses an activist position that is consistent versus inconsistent with investors' views, investors invest more in the CEO's firm because they perceive the CEO more positively. We also find that CEO inactivism can lead to investment decisions that are as favorable as when the CEO expresses a position consistent with investors' views; our process evidence suggests that this may occur because CEO inactivism increases the likelihood that investors believe the CEO shares their position on a social issue. Finally, we do not find evidence that investor decisions are influenced by whether CEO (in)activism is in response to an external prompt. This study contributes to the emerging literature on CEO activism, a unique form of voluntary disclosure, by providing evidence about how CEO (in)activism influences investors. We also contribute to the literature examining the impact of social media disclosure on investor decisions. Finally, our findings have practical implications for CEOs, who increasingly face external pressures to engage in activism.

Efforts to mitigate greenhouse gas emissions and curb climate change have recently become significant areas of concern to policymakers. We examine how management's focus on mitigating its direct versus indirect emissions influences the ability to attract capital from investors, and how this ability is moderated by the firm's environmental, social, and corporate governance (ESG) performance combined with adoption of an external emissions target. Using an experiment, we find that investors perceive a firm with a relatively poor ESG performance record as more socially responsible and are therefore more willing to invest when management focuses on mitigating direct versus indirect emissions. We also find that, regardless of ESG performance, adopting an external industry-based emissions target diminishes willingness to invest when management focuses on mitigating indirect emissions, but not when they focus on mitigating direct emissions. Our results provide insights for policymakers as to one impact of disaggregating direct (i.e. Scope 1) and indirect (i.e. Scope 2) emissions in ESG reporting.

This paper examines the impact of two recent developments related to the Securities and Exchange Commission (SEC). First, the SEC recently proposed new, politically divisive climate-related disclosures with a bright-line materiality threshold for all registrants. The proposed rules are expected to increase climate-related litigation against registrants. Second, a recent U.S. Court of Appeals ruling will likely cause significant changes to the SEC enforcement process and result in more jury trials, including trials related to climate disclosure. In an experiment, we predict and find that even though jurors are expected to set aside their personal political views when issuing verdicts, their views on climate change significantly influence their verdicts. Further, we find that rather than mitigating the influence of their views on climate change, the presence of a bright-line materiality threshold actually exacerbates this influence. We discuss the practical and regulatory implications of these results.

Employee reporting dishonesty is a significant area of concern for firms. In this study, we investigate how providing information about their prosocial actions, such as organizational citizenship behaviors, affects the extent of employee reporting dishonesty. We distinguish prosocial actions whose welfare effects are mutually beneficial (i.e., that help others and the employee), which are common in business practice, from those that are selfless in nature (i.e., that help others at a personal cost to the employee). In addition to examining the effect of the type of prosocial action on the extent of employee reporting dishonesty, we also examine the effect of construal (the manner in which individuals perceive and interpret the action). Using an experiment, we find that participants with high moral identity are less dishonest when they describe their selfless prosocial actions than when they describe their mutually beneficial prosocial actions, but only when they abstractly construe this information. However, we do not find evidence that the reporting dishonesty of participants with low moral identity is influenced by the type of prosocial action they provide information about or the construal of that information. We discuss implications of these results for theory and practice.

In this paper, we consider the relationships among corporate accountability, reputation, and tax behavior as a corporate social responsibility issue. As part of our investigation, we provide empirical examples of corporate reputation and corporate tax behaviors using a sample of large, U.S.-based multinational companies. In addition, we utilize corporate tax controversies to illustrate possibilities for aggressive corporate tax behaviors of high-profile multinationals to become a reputation threat. Finally, we consider whether reputation serves as an accountability mechanism for corporate tax behaviors among other mechanisms for holding firms accountable for corporate tax behaviors. Our conceptual work points to a complicated relationship among shareholder, stakeholder, and civic responsibilities in the development and execution of firm's corporate tax strategies. Building on those insights, our empirical illustration considers corporate reputation data alongside data which reflects corporate tax behavior. Based on this work, we find no clear trend or pattern indicating that reputation is associated with or affected by certain types of corporate tax behaviors. That is, our exploratory empirical illustration suggests that corporate tax behavior does not produce broad reputational consequences that would motivate a change in firm behavior. Drawing from celebrity and strategic silence research, we then suggest that reputation may not be a well-functioning mechanism for holding corporations to account for contributing their fair share of the resources used by government for the benefit of society and offer-related theoretical insights.

ABSTRACTRecent accounting research indicates that capital markets price firms' greenhouse gas (GHG) emissions and that disclosed emissions levels are negatively associated with firms' market values. The departure point for this study is to investigate whether investors value firms differently based on the strategies firms use to mitigate GHG emissions. These strategies include making operational changes, which reduces emissions attributable to the firm, and purchasing offsets, which reduces emissions unattributable to the firm. Using an experiment, we hold constant a firm's financial performance, investment in emissions mitigation, and net emissions, and find evidence that nonprofessional investors perceive the firm to be more valuable when it primarily uses an operational change strategy versus an offsets strategy. However, consistent with theory, this result only occurs when the firm's prior sustainability performance is below the industry average and not when it is above the industry average. This difference in firm value is consistent with the notion that nonprofessional investors believe information about a firm's emissions management strategy is material. Supplemental exploratory analyses reveal that our results are mediated by investors' perception that an operational change strategy is more socially and environmentally responsible than an offsets strategy for below industry average firms. Implications for our findings on theory and practice are discussed.