Routledge has recently published Responsible Finance and Accounting: Performance and profit for better business, society and planet, which features the work of Professor Qinqin Zheng from the School of Management Fudan University. The book highlights her research contribution, drawing attention to the significance of the link between a company’s corporate social performance (CSP) and corporate financial performance (CFP) for investors.
Bridging the Gap Between Corporate Social and Financial Performance by CoBS Editor Muskan Chourey from an interview with Professor Qinqin Zheng. Related research: Corporate Social Performance, Analyst Stock Recommendations, and Firm Future Returns. Strategic Management Journal, Strat. Mgmt. J., 36: 123–136 (2015). DOI: 10.1002/smj
Qinqin Zheng, a business administration professor at the esteemed School of Management at Fudan University in China, has published her research in several highly respected international research journals. Her research has explored various aspects of business and management and their effects on society at large. In the inaugural book of the Routledge-CoBS collection, Professor Zheng shares insights from her research, which was originally published in the Strategic Management Journal* and is now featured in the new book under the title With Heart and Head: How to bring them together for sustainable investment decisions.
According to Professor Zheng, her research revealed three key takeaways for readers. Firstly, security analysts act as an important informational pathway through which CSP affects CFP more efficiently. Secondly, when security analysts are active in the firms’ operational environment, the benefits that firms gain from CSP are more likely to be realized. And thirdly, firms that take better care of their various stakeholders are more likely to attract shareholders to buy their stocks and enhance share returns ultimately.
By considering the effect of CSP on analysts, managers can acquire a more complete picture of the eventual financial impact of their investment in firm CSP.
These takeaways are important in the context of responsible finance and accounting because they reveal that firm CSP is regarded as an intangible and promising asset by analysts. “Analysts play a pivotal information-bridging role, through which shareholder and stakeholder views can be better aligned,” Professor Zheng noted. “In this sense, analysts can be considered a strategically important component of firms’ multi-stakeholder management.”
When asked about the change she would like to see happen following her research, Professor Zheng emphasized the need for firm managers to be cognizant of analyst-based mechanisms that may account for the ultimate financial returns to CSP. By considering the effect of CSP on analysts, managers can acquire a more complete picture of the eventual financial impact of their investment in firm CSP.
In conclusion, Professor Zheng’s research highlights the importance of CSP in enhancing a firm’s reputation, attracting more investors, and ultimately improving financial performance. Her inspiring message for readers is that only CSP activities that capture the attention of outside evaluators are substantial enough to be seen as a credible commitment. Therefore, social impact is an important indicator that helps managers to ensure their CSR initiatives are making a positive contribution to society and the environment.
* Related research: Corporate Social Performance, Analyst Stock Recommendations, and Firm Future Returns. Strategic Management Journal, Strat. Mgmt. J., 36: 123–136 (2015). DOI: 10.1002/smj
Discover With Heart and Head: How to bring them together for sustainable investment decisions, Qinqin Zheng, School of Management Fudan University, featured in:
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Learn more about the Council on Business & Society
The Council on Business & Society (The CoBS), visionary in its conception and purpose, was created in 2011, and is dedicated to promoting responsible leadership and tackling issues at the crossroads of business and society including sustainability, diversity, ethical leadership and the place responsible business has to play in contributing to the common good.
Member schools are all “Triple Crown” accredited AACSB, EQUIS and AMBA and leaders in their respective countries.
- ESSEC Business School, France-Singapore-Morocco
- FGV-EAESP, Brazil
- School of Management Fudan University, China
- IE Business School, Spain
- Keio Business School, Japan
- Smith School of Business, Canada
- Stellenbosch Business School, South Africa
- Trinity Business School, Trinity College Dublin, Ireland
- Warwick Business School, United Kingdom.