Stepping across for social approval: Ties to independent foundations' boards after financial restatement

Stepping across for social approval: Ties to independent foundations' boards after financial... Research Summary: Integrating research on independent philanthropy and organizational misconduct, we argue that affiliations with independent foundations provide social approval benefits for firms that restate their financials. We use a panel of S&P 500 companies from 2004 to 2011 to investigate the addition of foundation board ties by restating firms. CEOs of restating firms add more new foundation board ties than CEOs of non‐restating firms, while existing corporate philanthropy and greater corporate reputation diminish this effect. We also find that new ties to foundations boards influences media tenor for restating firms more than it does for non‐restating peers. Our study offers a nuanced analysis of the post‐crisis actions of restating firms relative to non‐restating peers and highlights the relevance of ties to nonprofit boards for corporate governance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

Stepping across for social approval: Ties to independent foundations' boards after financial restatement

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Publisher
Wiley Subscription Services, Inc., A Wiley Company
Copyright
Copyright © 2018 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
D.O.I.
10.1002/smj.2754
Publisher site
See Article on Publisher Site

Abstract

Research Summary: Integrating research on independent philanthropy and organizational misconduct, we argue that affiliations with independent foundations provide social approval benefits for firms that restate their financials. We use a panel of S&P 500 companies from 2004 to 2011 to investigate the addition of foundation board ties by restating firms. CEOs of restating firms add more new foundation board ties than CEOs of non‐restating firms, while existing corporate philanthropy and greater corporate reputation diminish this effect. We also find that new ties to foundations boards influences media tenor for restating firms more than it does for non‐restating peers. Our study offers a nuanced analysis of the post‐crisis actions of restating firms relative to non‐restating peers and highlights the relevance of ties to nonprofit boards for corporate governance.

Journal

Strategic Management JournalWiley

Published: Jan 1, 2018

Keywords: ; ; ; ;

References

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