Abstract
Several firms claim to be socially responsible. We confront these claims with the data using the most notable such proclamation in recent years, the August 2019 Statement on the Purpose of a Corporation by the Business Roundtable (BRT). The BRT is a large, deeply influential business group containing many of America’s largest firms; the 2019 Statement proclaimed that a corporation’s purpose is to deliver value to all stakeholders, rather than to solely maximize shareholder value. However, we find no evidence that BRT members – who voluntarily signed the Statement – engaged in such stakeholder-centric practices prior or subsequent to signing. Relative to peer firms, publicly listed signatories of the BRT statement commit environmental and labor-related compliance violations more often (and pay more in compliance penalties), have higher carbon emissions, and rely more on government subsidies. BRT firms are also more likely to disagree with proxy recommendations on shareholder proposals. Our results suggest that firms’ proclamations of stakeholder-centric behavior are not backed up by any hard data on these firms’ operations.