License to Ill
Firms that engaged in prior socially responsible behavior are more likely to then engage in socially irresponsible behavior, research finds
By Sean Nealon on November 20, 2013
[Margaret Ormiston, Elaine Wong] found that prior corporate social responsibility was related to subsequent corporate social irresponsibility. More specifically for roughly every five positive actions that a firm takes, this gives them license to commit one negative action.
“These findings show that CEOs should be aware of this tendency so that they can prevent their companies from slipping into this pattern,” Wong said. “Additionally, corporate boards can’t allow CEOs to rest on their laurels. They need to be vigilant in monitoring CEOs.”