【公开学术报告】Tailored Adaptation: Aligning Social Issue Engagement With Types Of Legitimacy Threats

Tailored Adaptation: Aligning Social Issue Engagement With Types Of Legitimacy Threats

Guest Speaker: Wenxin Wency Wu (Peking University)

Date & Time: Thursday, October 24, 2024, 9:30 - 11:00 am (Beijing Time)

Zoom Meeting ID: 843 110 28987 (Password: 800260)

Join via the Link:https://us02web.zoom.us/j/84311028987

ABSTRACT

Prior research generally suggests that addressing shareholder interests may come at the expense of non-shareholding stakeholders. However, our study challenges this notion by exploring how certain social issue engagements, which address the concerns of some non-shareholding stakeholders, can also align with shareholder interests. We revisit this perspective by examining the relationship between legitimacy threats (i.e., shareholder activism and social disapproval) and social issue engagement. We find that shareholder activism is positively associated with the materiality of social issue engagement, reflecting a firm’s relative emphasis on material social issues over immaterial ones. Conversely, social disapproval is negatively associated with this emphasis. Furthermore, the relationship between shareholder activism/social disapproval and materiality of social issue engagement is contingent upon factors such as the engagement of investor relations officers, the presence of social welfare nonprofits, and the promulgation of SASB standards. Our study contributes to the understanding of how firms respond to legitimacy threats and broadens the literature on social issue management.