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Corporate Social Responsibility, Banking Industry, Performance, F210, G210, M140,

Manuscript Type: EmpiricalResearch Question/Issue: This study examines how different types of owners relate to corporate social responsibility (CSR). Research Findings/Insights: We use firm-level data for more than 600 European firms from 16 countries and 35 industries for 2005. We find that ownership by employees, individuals, and firms is associated with relatively poor corporate social policies of the firms they invest in. In contrast, the holdings by banks and institutional investors as well as those by the state appear to be neutral in this respect. Theoretical/Academic Implications: This study develops and tests notions as to how particular types of owners could have a specific impact on the firm's CSR. The relative value put upon CSR can differ along different types of owners. This results from their different economic roles in society. The study provides empirical support for the relationship between ownership type and CSR policies in Europe. As such, it provides a new focus on the content of shareholder activism, namely that shareholder background has to be taken into account. Another innovation is that we show it is important to account for the multidimensional nature of CSR as well. Practitioner/Policy Implications: This study offers a new perspective for firms, investors and other stakeholders about portfolio investments and CSR. As we find that it does matter who invests, corporate engagement policies can be directed much more effectively. In particular, the investors who act as intermediaries appear to be the most sensitive ones in this respect. Our study suggests that firms should take the background of their shareholders into account in relation to their CSR strategy. Furthermore, our study helps stakeholders to direct their efforts more effectively. It also provides a perspective for executives and investment managers of multinational firms to consider if and how they can create social value next to shareholder value. We suggest that policy makers promote the transparency of ownership information as well as that of CSR performance.

We investigate how conventional asset managers account for environmental, social, and governance (ESG) factors in their investment process. We do so on the basis of an international survey among fund managers. We find that many conventional managers integrate responsible investing in their investment process. Furthermore, we find that ESG information in particular is being used for red flagging and to manage risk. We find that many conventional fund managers have already adopted features of responsible investing in the investment process. Furthermore, we argue and show that ESG investing is highly similar to fundamental investing. We also reveal that there is a substantial difference in the ways in which U.S. and European asset managers view ESG.

We investigate how earnings management is associated with corporate social responsibility (CSR) and investor protection with 139 firms in ten Asian countries. In Asia, CSR is increasingly attracting attention but the legal system generally is perceived as being poor. We hypothesize that there is an inverse relationship between CSR and earnings management, as well as between investor protection and earnings management. Regarding earnings management, we investigate earnings smoothing and earnings aggressiveness. We find that Asian firms with relatively good CSR are engaged significantly less with earnings management. Investor protection also is negatively associated with earnings management. We find that this is very case sensitive and depends on the ways in which earnings management and investor protection are actually measured. In addition, we establish that CSR shows positive interaction with investor protection. We conclude that in Asian countries CSR moderates firms’ earnings management and that this is conditioned by the legal system. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.

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In order to operate effectively in a continuously changing and frequently turbulent markets, companies must account for the needs and expectations of both their management and lower-ranking employees. To that end, it is essential that business organizations identify ways to adopt changes that will guarantee their success. One way to improve the market position of a company is to employ the principles of corporate social responsibility. A key requirements as well as a key area of such responsibility is occupational health and safety, whose guidelines fall within the scope of the overall practices enshrined in labor law. A prerequisite for the effective fulfillment of such requirements is to secure competent contractors who will undertake all measures associated with this field. The article notes the issue and examines it against the standards set forth in ISO 26000. The author demonstrates the need to acquire competences that will enable the concerned company to ensure the safe performance of work and the fulfillment of occupational health and safety requirements in conformity with the principles of corporate social responsibility. Only by embracing the rules of CSR under such an approach will a business be able to achieve the desired outcomes.

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