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Research Summary: Research suggests firms can reduce stakeholder contention (e.g., lawsuits, protests) by collaborating with threatening stakeholders. We propose that by tapping into stakeholder networks and identities, collaborations also produce ripple effects beyond the firm's partner to attenuate contention from a broader set of stakeholders. Using variation in firms' and stakeholders' willingness to collaborate exogenous to contention to account for selection, our examination of contentious and collaborative interactions between 136 environmental movement organizations and 600 US firms corroborates our arguments. Firms face less contention when they collaborate with a better‐connected stakeholder motivated to share affirming information about the firm, or with a more contentious and authentic stakeholder. Our findings generalize to stakeholder criticism beyond movement organizations, suggesting collaborations are powerful tools for fashioning less contentious environments. Managerial Summary: Companies can reduce conflict from hostile stakeholders like social activists by collaborating with their friends. We find social movement organizations mount fewer protests, boycotts, lawsuits, and other conflict against a company that collaborates with an organization that is either well connected in the movement or known for mobilizing movement's grassroots. This suggests that cross‐sector collaborations quell conflict through passing affirming information about a company through interorganizational networks or through the broadcast of an affirming signal to the broader stakeholder environment. We find that criticism from a wide range of stakeholders (e.g., media) also abates, suggesting that collaborations are powerful tools for fashioning less contentious environments. [ABSTRACT FROM AUTHOR]

While prior work has shown that a firm's market performance affects the loyalty of its board, little is known about how corporate social responsibility affects directors' willingness to serve. In this project, we shed light on this question by exploring how social movement boycotts that challenge a firm's social responsibility affect board turnover. We find that boycotts provoke a significant increase in turnover at targeted firms, and that directors are especially likely to leave after boycotts that signal that the firm's social values conflict with their personal values. Specifically, we find that an ideological match between a board member and the activist challengers predicts exit: liberals are more likely to leave after liberal challenges and conservatives are more likely to leave after conservative challenges. Moreover, we show that turnover is consistent with the rigidity of the right hypothesis in political psychology: conservatives, as compared to liberals, are more prone to entrenchment when their firms face challenges from the opposition. Our study offers strong evidence that corporate social performance matters to corporate directors, and provides insights into the manner in which contentious crises affect the motivation of corporate insiders. [ABSTRACT FROM AUTHOR]

ABSTRACT This Article draws upon recent social psychological research to demonstrate the psychological difficulty of distinguishing between torture and enhanced interrogation. We critique the accuracy of evaluations made under the [...]

This paper explores whether and how social activists’ challenges affect politicians’ willingness to associate with targeted firms. We study the effect of public protest on corporate political activity using a unique database that allows us to analyze empirically the impact of social movement boycotts on three proxies for associations with political stakeholders: the proportion of campaign contributions that are rejected, the number of times a firm is invited to give testimony in congressional hearings, and the number of government procurement contracts awarded to a firm. We show that boycotts lead to significant increases in the proportion of refunded contributions, as well as decreases in invited congressional appearances and awarded government contracts. These results highlight the importance of considering how a firm’s sociopolitical environment shapes the receptivity of critical non-market stakeholders. We supplement this analysis by drawing from social movement theory to extrapolate and test three key mechanisms that moderate the extent to which activists’ challenges effectively disrupt corporate political activity: the media attention a boycott attracts, the political salience of the contested issue, and the status of the targeted firm. [ABSTRACT FROM AUTHOR]

We live, it is said, in a second Gilded Age, in which politics is dominated by corporate power and elite business interests. But how does corporate money flow into politics? This Article provides an original empirical analysis of when and why corporations engage in particular forms of political activity and uses those findings to develop a novel, empirically-grounded approach to the First Amendment’s treatment of traceability mandates in politics. We analyze the conditions under which firms shift between (1) using their political action committees (PACs) to contribute to candidates and political parties, and (2) engaging in less traceable forms of political activity, like lobbying, in which the specific targets of firms’ influence efforts are unknown. This Article identifies a key variable that explains when and why corporations shift from lighter (more traceable and direct) to darker (less traceable and more indirect) channels of political engagement. We demonstrate that corporate political activity grows darker as a firm’s reputation grows more negative. This dynamic produces the disquieting result that the corporate political interventions that are likely to be the most controversial are also those most likely to be deployed in ways the public is least able to monitor. Our findings indicate that the traceability of money creates a concrete limit on the ability of corporate actors to influence politics—a limit which plausibly applies to political giving more broadly. Corporate donors who are seen as political liabilities find it increasingly difficult to locate politicians who will openly take their money or accept other support. Politicians refuse or return traceable donations from disreputable donors. Our research thus demonstrates that the power of business in politics is more conditional than generally appreciated. This Article uses these empirical findings to interrogate the relationship between traceability mandates in politics and theories of the First Amendment. While the Supreme Court has prominently struck down restrictions on money in politics in cases like Citizens United v. Federal Election Commission, it has repeatedly upheld a variety of disclosure requirements. For a range of reasons, including the Supreme Court’s decision in Americans for Prosperity Foundation v. Bonta, however, disclosure mandates are likely to become an increasingly important site of conflict in both policy and litigation, making it ever more important to assess and theorize the justifications for them. Our research suggests an empirically-grounded justification: traceability alters politicians’ behavior, causing them to act more consistently with public opinion. In other words, traceability mandates make politicians more accountable to the people. At the same time, there is evidence that traceability policies, and the reduction of darker corporate money in politics they produce, promote the public’s belief that their views shape the political system. Traceability mandates, in sort, advance both objective and subjective forms of democratic accountability. We thus argue that policies that advance the traceability of corporate money in politics not only further core First Amendment values but may be required by them. By identifying how and why corporate money flows into politics at a fine level of detail, this Article also provides important information that policy makers can use to craft campaign finance and lobbying reforms. Our empirical findings and theoretical analysis support policy changes that increase the traceability of corporate money in politics, including broader and more robust disclosure requirements for corporate lobbying and individual donations made by corporate executives and directors. [ABSTRACT FROM AUTHOR]

Research Summary: Exploiting a whistleblower's leak of the American Legislative Exchange Council's (ALEC) corporate sponsors, we quasi‐replicate and extend Werner's (2017) event study of investor reaction to covert corporate political activity (CPA). Werner found that investors reacted positively to the accidental disclosure of covert ties to the Republican Governors Association. In contrast, when we apply the same research design to the ALEC leak, we find that, on average, firms tied to ALEC experienced negative abnormal returns. In cross‐sectional models, we also find that the abnormal returns of ALEC sponsors were more negative for firms that faced shareholder contention around CPA and had liberal‐leaning employees, yet less negative for firms engaged in higher levels of institutional corporate social responsibility. The latter two cross‐sectional findings extend Werner's results. Managerial Summary: We replicate and extend a study that examined how investors reacted to the disclosure of firms' covert contributions to a conservative‐leaning nonprofit organization. In contrast to that paper, we find that investors react negatively toward firms that contributed to ALEC, given its controversial positions on sociopolitical issues such as "stand your ground" gun laws. Investors reacted more negatively if the firm's employees were more liberal leaning or if the firm recently faced a shareholder resolution requesting that it voluntarily disclose all political contributions. However, investors' reactions were less negative if the firm engaged in high levels of corporate social responsibility. An implication for managers is that they should consider the risk associated with their firms' covert ties to political organizations perceived as controversial by the media. [ABSTRACT FROM AUTHOR]