Corporate social responsibility behaviors and corporate reputation

Purpose: This paper aims to study how corporate social responsibility (CSR) behaviors can lead to corporate membership on Fortune Magazine’s Most Admired Companies list. Design/methodology/approach: Regression analysis using environmental, social and governance (ESG) statistics published by MSCI-KLD as independent variables to predict the behaviors that lead to most admired status. Findings: Not surprisingly, corporate financial performance (CFP) is the largest contributor to membership on the list. However, after controlling for CFP, the analysis finds that specific social responsibility behaviors contribute to membership on the Fortune list. Practical implications: This paper finds that CSR behaviors are important to a firm’s reputation as measured by Fortune’s Most Admired Companies list. Therefore, companies should continue with social responsibility activities to improve their reputation with investors. Originality/value: Many articles test the effect of ESG on financial performance and the role of financial performance on stock price. This paper is unique in that it measures the impact of CSR on corporate reputation using an important financial market benchmark – the Fortune Most Admired Companies list.