Signposts or Weathervanes? The Curious Case of Corporate Social Responsibility and Conflict Minerals

Arikan, Ozlem; Reinecke, Juliane; Spence, Crawford; Morrell, Kevin

doi:10.1007/s10551-015-2935-3

Cited by 25 publications

(12 citation statements)

References 42 publications

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“…One stream of work in this literature has examined the business impact of managing conflict minerals and conflict minerals disclosures. Arikan, Reinecke, Spence, and Morrell () and Epstein and Yuthas () discuss the broad implications of conflict minerals for a firm's management strategy. Kalkanci, Ang, and Plambeck () show that in a competitive environment, only firms that have conflict mineral‐free supply chains should voluntarily disclose their conflict minerals findings.…”

Section: Literature Reviewmentioning

confidence: 99%

Does supply chain visibility affect operating performance? Evidence from conflict minerals disclosures

Swift

Guide

Muthulingam

2019

J of Ops Management

139

107

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Firms are increasingly held accountable for their suppliers' transgressions. Consequently, firms need to develop upstream visibility to exercise control over their supply chains. An emerging body of work has recognized the importance of supply chain visibility and has examined it using analytical models, behavioral methods, and case studies. Still, large-sample empirical evidence on the benefits of supply chain visibility remains elusive. We seek to bridge this gap by examining conflict minerals disclosures (mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act) and financial reports to evaluate whether firms with greater visibility into their conflict minerals supply chains achieve improved operating and market performance. We use the data from conflict minerals disclosures (Form SD) to distinguish between firms that have high or low visibility into their conflict minerals sources. Then, we use event study methods to analyze differences in operating and market performance between firms with high visibility and firms with low visibility. We find that firms with high visibility into their conflict minerals supply chains achieve higher profitability than comparable firms with less visibility. In addition, we find that firms with high visibility into their conflict minerals supply chains realize improved sales performance and stock market valuations. Our results are relevant to managers because they show that firms can attain operational and market benefits by improving visibility in their supply chains. K E Y W O R D Sconflict minerals, event study, operating performance, supply chain visibility

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Section: Literature Reviewmentioning

confidence: 99%

Does supply chain visibility affect operating performance? Evidence from conflict minerals disclosures

Swift

Guide

Muthulingam

2019

J of Ops Management

139

107

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“…In summary, Section 1502 of the Dodd–Frank Act provides the first legislation for mandatory human rights reporting in the US. Prior research on conflict minerals has examined the conceptual or legal aspects that led to the developments of this innovative regime (Arikan et al ., ; Sankara et al ., ; Schwartz and Nelson, ). After the first two rounds of mandatory reports under the Dodd–Frank Act, there was in fact a prominent variation in the occurrence of CMDs and, for filing firms, regarding their compliance.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…Since 2014, companies publicly listed in the United States for which 3TG minerals are ‘necessary for the functionality or production’ of their products must disclose to the US Securities and Exchange Commission (SEC) their practices related to conflict minerals. This mandatory reporting regime, ratified in Section 1502 of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd–Frank Act), is the first attempt to legislate human rights disclosures (Arikan et al ., ; Sankara et al ., ; Christensen et al ., ). The Dodd–Frank Act illustrates the emerging need to regulate social conflicts and human rights abuses by demanding an increase in the disclosure of management practices regarding conflict minerals issues as part of a firm's business strategy.…”

Section: Introductionmentioning

confidence: 97%

“…Brammer and Pavelin, ; Cormier and Magnan, ; Pérez‐López et al ., ). We provide a post‐implementation assessment of a novel mandatory disclosure rule that aims to incorporate human rights and social performance into firms’ business strategies and disclosure practices, with relevant implications for corporate report preparers and users (Arikan et al ., ; Hofmann et al ., ). CMD offers a suitable setting to draw upon disclosure theory and examine the internal factors that enable managers’ discretion in external reporting decisions for emergent forms of mandatory (non‐)financial information with prevailing enforcement leniency (e.g.…”

Section: Introductionmentioning

confidence: 97%

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Determinants of Conflict Minerals Disclosure Under the Dodd–Frank Act

Via

Perego

2018

Bus Strat Env

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This paper examines conflict minerals disclosure (CMD) as mandated by the Dodd-Frank Act. We rely on a thorough content analysis conducted by the Responsible Sourcing Network on a sample of 122 firms that filed CMDs with the US Securities and Exchange Commission in 2015. We document that firms with long-term oriented incentives, a greater number of board meetings, strong corporate governance systems and inclusion in a sustainability index are associated with higher levels of CMD. Our results suggest that in the presence of enforcement leniency, both internal and external firm-specific factors affect strategic (non-)compliance with a mandatory social disclosure regime. We provide implications for supply chain managers, corporate reporters and policy-makers involved in the adoption of responsible sourcing strategies.

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“…With regards to the conflict minerals disclosure, Congress intends to guide firms "to exercise due diligence on and formalize the origin…of conflict minerals used in their products and on their suppliers to ensure that conflict minerals used in the products of such suppliers do not…finance armed conflict or result in labor or human rights violations" (Dodd-Frank Act, p.841). Indeed, recent research also refers to both supply chain due diligence (Arikan et al 2017;Hofmann et al 2018) and government payment disclosure (Aaronson 2005) as corporate social responsibility concerns. 4 Note that we are not examining the firms' risk disclosures.…”

Section: Introductionmentioning

confidence: 99%

Stakeholder Perceptions of Risk in Mandatory Corporate Responsibility Disclosure

2020

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Meeting for their helpful comments and suggestions. Data Availability:The source data that support the results of this study are from the Securities and Exchange Commission website at https://www.sec.gov/comments/s7-40-10/s74010.shtml (Comments on Proposed Rule: Conflict Minerals) and https://www.sec.gov/comments/s7-42-10/s74210.shtml (Comments on Proposed Rule: Payments by Resource Extraction Issuers). The remainder of our data is from subscription-based databases accessed through Wharton Research Data Services. Restrictions apply to the availability of these data, which are available from the authors upon permission of the data providers.

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Signposts or Weathervanes? The Curious Case of Corporate Social Responsibility and Conflict Minerals

Cited by 25 publications

References 42 publications

Does supply chain visibility affect operating performance? Evidence from conflict minerals disclosures

Does supply chain visibility affect operating performance? Evidence from conflict minerals disclosures

Determinants of Conflict Minerals Disclosure Under the Dodd–Frank Act

Stakeholder Perceptions of Risk in Mandatory Corporate Responsibility Disclosure

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