The Influence of Corporate Social Responsibility Disclosures and Assurance on Jurors’ Judgments

Abstract

SUMMARY This study examines whether management’s corporate social responsibility (CSR) motives and CSR assurance influence jurors’ negligence and punitive damages assessments using a 2 × 2 experiment. CSR activities can provide insurance-like protection from negative reactions during a corporate crisis if stakeholders perceive altruistic motives. However, it is not known whether this insurance-like protection applies during litigation. Findings suggest that disclosure of altruistic CSR activities (i.e., without expectation of financial returns) improves jurors’ affective response to the defendant and perceptions of company behavior prior to a negative event compared to self-serving CSR activities (i.e., expectation of financial returns), which reduce negligence and punitive damages assessments. However, when disclosures are assured, the relationship changes. In this scenario, altruistic and self-serving CSR have similar influences on jurors’ judgments. Overall, results suggest that CSR disclosure and assurance may provide benefits during litigation by increasing jurors’ affective reaction to the defendant and perceptions of the company’s behavior.