Theoretical arguments regarding the effect of corporate social responsibility (CSR) on firm liability risk are abundant; however, empirical evidence about this relationship is scarce. We investigate the relationship between CSR and the personal liability risk of a firm’s directors and officers. We argue that companies with better CSR performance represent a better underwriting risk for directors’ and officers’ (D&O) insurance providers and, therefore, have a lower cost of insurance. Our results show that firms with better CSR performance are more likely (...) to purchase D&O insurance and have a lower premium-to-coverage ratio, known as the insurance rate-on-line. We also show that this risk-reduction effect is stronger for firms that operate in a high-risk environment and have higher sales growth. These results provide evidence that CSR can be used as a risk management tool to mitigate liability risk and suggest which firms benefit most from this effect. (shrink)

In spite of accruing concerted scholarly and managerial interest since the 1950s in corporate social responsibility (CSR), its implementation is still a growing topic as most of it remains academically unexplored. As CSR continues to establish a stronger foothold in organizational strategies, understanding its implementation is needed for both academia and industry. In an attempt to respond to this need, we carry out a systematic review of 122 empirical studies on CSR implementation to provide a status quo of the literature (...) and inform future scholars. We develop a research agenda in the form of an integrated framework of CSR implementation that pronounces its multi-dimensional and multi-level nature and provides a snapshot of the current literature status of CSR implementation. Future research avenues relating to multi-level studies, theoretically supported research models, developing economy settings, and more are recommended. Practitioners can also benefit through utilizing the holistic framework to attain a bird’s eye view and proactively formulate and implement CSR strategies that can be facilitated by collaborations with CSR scholars and experts. (shrink)