Flammer, Hong, and Minor (2017)

Flammer, Caroline, Bryan Hong, and Dylan Minor.  “Corporate Governance and the Rise of Integrating Corporate Social Responsibility Criteria in Executive Compensation.”  Working paper (Boston University), 2017.

From authors' abstract:  "Using a novel database of CSR contracting, we find that...the adoption of CSR contracting leads to i) a reduction in short-termism; ii) an increase in  firm  value;  iii)  an  increase  in  social  and  environmental  performance;  iv)  a  reduction  in emissions;  and  v)  an  increase  in  green  innovations.  These  findings  are  consistent  with  our theoretical arguments highlighting a new form of agency conflict—the misalignment between shareholders’  and  managers’  preferences  for  stakeholder  engagement—and  suggest  that  CSR contracting can enhance corporate governance."

LK comment:  Strong paper.  Won 2017 Moskowitz Prize, also Honorable Mention in 2017 IRRC annual investor research competition.

Link:  https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2831694