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A central and contentious debate in many literatures concerns the relationship between financial and social performance. We advance this debate by measuring the financial–social performance link mutual funds that practice socially responsible investing (SRI). SRI fund managers have an array of social screening strategies from which to choose. Prior studies have not addressed this heterogeneity within SRI funds. Combining modern portfolio and stakeholder theories, we hypothesize that the financial loss borne by an SRI fund due to poor diversification is offset as social screening intensifies because better‐managed and more stable firms are selected into its portfolio. We find support for this hypothesis through an empirical test on a panel of 61 SRI funds from 1972 to 2000. The results show that as the number of social screens used by an SRI fund increases, financial returns decline at first, but then rebound as the number of screens reaches a maximum. That is, we find a curvilinear relationship, suggesting that two long‐competing viewpoints may be complementary. Furthermore, we find that financial performance varies with the types of social screens used. Community relations screening increased financial performance, but environmental and labor relations screening decreased financial performance. Based on our results, we suggest that literatures addressing the link between financial and social performance move toward in‐depth examination of the merits of different social screening strategies, and away from the continuing debate on the financial merits of either being socially responsible or not. Copyright © 2006 John Wiley & Sons, Ltd.

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While interest in the concept of corporate reputation has gained momentum in the last few years, a precise and commonly agreed upon definition is still lacking. This paper reviews the many definitions of corporate reputation present in the recent literature and categorizes these definitions based on their similarities and differences. The purpose of the study is to review, analyze and evaluate prior definitional statements of corporate reputation. The analysis led us to conclude that the cluster of meaning that looks most promising for future definitional work uses the language of assessment and specific terms such as judgment, estimation, evaluation or gauge. Based on this review work and a lexicological analysis of the concept of reputation, we propose a new definitional statement that we think adds theoretical clarity to this area of study. The statement defines corporate reputation more explicitly and narrowly and distinguishes this concept from corporate identity, corporate image and corporate reputation capital. It is our hope that this study and the resulting definition will provoke further scholarship devoted to developing one voice when it comes to corporate reputation as a concept. Corporate Reputation Review (2006) 9, 26 -38.

Building on the theoretical argument that a firm's ability to profit from social responsibility depends upon its stakeholder influence capacity (SIC), we bring together contrasting literatures on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) to hypothesize that the CSP‐CFP relationship is U‐shaped. Our results support this hypothesis. We find that firms with low CSP have higher CFP than firms with moderate CSP, but firms with high CSP have the highest CFP. This supports the theoretical argument that SIC underlies the ability to transform social responsibility into profit. Copyright © 2012 John Wiley & Sons, Ltd.