CSR projects gain when US Presidents, honchos differ

Business leaders take up more social responsibility projects when they disagree with the White House, reveals a study.

Liberal CEOs invested more in socially conscious activities, like diversity initiatives and environment conservation, when they felt those values were threatened, found the researchers.

"Republican Presidents aren't as interested in those values, so business leaders think, 'we need to do more to promote and protect these values'," said Nara Jeong, Assistant Professor of Management at San Francisco State University in the US.

When business leaders shared the same political beliefs as the President, support for socially conscious initiatives declined.

For left-leaning CEOs, more likely to engage in socially responsible activities, those efforts declined by an average of 18 per cent, Jeong said.

Business leaders with the same political orientation as the President might have an expectation that the government "will deliver on the social values they hold dear," said the study published in the journal Management Decision.

As a result, these executives might feel empowered to focus on their companies' financial performance, Jeong added.

For the study, the researchers examined a decade of behaviour, starting mid 1990s.

Jeong and her collaborator went a step further and tested whether politics encouraged companies to act irresponsibly. Examples could include increasing pollution, lowering emission standards or doing away with policies that protect minority employees.

Yet the researchers found no evidence that firms engaged in such activities based on whether their politics were aligned or misaligned with the President.IANS