Corporate social purpose statements and employee perceptions about the CEO and the corporation: A large sample natural experiment

Abstract

On August 19, 2019, about 200 CEOs of large U.S. corporations signed the “Purpose of a Corporation” statement announcing that their corporations will assume a greater social purpose and serve the interests not only of shareholders but also of employees, customers, suppliers, and communities. We use this statement as a natural experiment which allows us to examine the effects of such social purpose statements on employee perceptions about the CEO and the corporation. Our results show that corporate social purpose statements that directly involve employee interests positively affect employee perceptions about the CEO and, to a lesser extent, the corporation. Moreover, this positive impact is stronger when these statements are coupled with corresponding corporate actions and practices, i.e., actual investments in employees and employee-perceived benefits, including the perceived benefit of working from home. Finally, we discuss this study's research and practical implications and suggest interesting future research opportunities.