Abstract

The strategic consequences of an organization's Environmental, Social, and Governance (ESG) efforts are driven largely by the specific information stakeholders observe and evaluate. As firms project a growing volume of public claims and observable social outcomes, stakeholders must navigate a complex informational environment to decide how much weight to assign to what organizations say, what they do, and whether their words are consistent with their actions. Clarifying how stakeholders interpret these varied signals is therefore vital to understanding the strategic implications of ESG efforts. To that end, this dissertation asks: how are different pieces of organizational information related to stakeholder reactions to firms’ ESG efforts. Each chapter examines distinct pieces of information that stakeholders use when forming their evaluations of organizational social commitments. In Chapter 1, that piece of information is the firm's stated motive – the rhetorical frame a firm strategically attaches to its ESG activity. In Chapter 2, it is the organization's visible leadership composition. In Chapter 3, it is the alignment between a firm’s previous rhetoric and revealed evidence. Together, the three chapters map how information from different organizational signals shapes stakeholder reactions. In Chapter 1, I examine how the communication of motives behind ESG activities affects employer attractiveness in the labor market. The ESG literature establishes that stakeholders' perceived motives behind firms' ESG behaviors are an important factor affecting firm performance (Cassar and Meier, 2021; Li and Soule, 2022). Yet the literature pays little attention to how firms can strategically shape those perceptions through communication. Using a choice-based conjoint experiment, I quantify how potential employees respond when a firm communicates purely pecuniary motives, purely nonpecuniary motives, or a combination of both. The findings show that communicating nonpecuniary motives alone increases employer attractiveness, while purely pecuniary framing penalizes it. Interestingly, these effects are not uniform: lower-income and less-educated workers penalize pecuniary framing most severely, while more highly educated workers are the only group to respond positively to the combined motives condition, suggesting that no single communication strategy is optimal across a heterogeneous labor pool. In Chapter 2 with Dan Elfenbein and Ming zhu Wang, I shift from rhetorical framing to organizational reality by examining whether the visible demographic composition of nonprofit boards is associated with fundraising performance. This chapter explores a fundamental tension: while resource dependence (Pfeffer and Salancik, 1978) and legitimacy frameworks (Suchman, 1995) suggest board diversity improves fundraising by expanding community networks, the extreme demographic concentration of U.S. philanthropic wealth creates a countervailing risk of social distance from affluent donors. Using a panel of IRS 990 filings between 2010 and 2024, we find a positive but strongly context-dependent relationship between board diversity and fundraising. The financial returns to diverse leadership are concentrated among larger organizations and amplified in wealthier, more politically liberal states, while attenuating in areas with a predominantly White population. Chapters 1 and 2 examine rhetoric and reality in isolation. Chapter 3 asks what happens when both are available simultaneously and stakeholders can directly compare them. Exploiting the mandatory public disclosure of EEO-1 workforce reports as an exogenous information shock, I find that investors do not react to new workforce data in isolation but react to its consistency with what the firm had previously claimed. Firms whose revealed workforce composition corroborated their prior substantive DEI claims earned positive abnormal returns, while those whose claims outpaced their demographic reality showed directionally negative returns. This alignment effect was amplified for firms with high prior information asymmetry, confirming that trustworthiness signals carry the greatest value where objective information is scarcest. By examining what organizations say, what they do, and the alignment between the two, this dissertation provides a deeper understanding of how stakeholders process and react to different types of ESG information. The findings underscore the critical link between the ESG signals an organization sends and the subsequent resource allocation decisions of potential employees, donors, and investors. Ultimately, this research highlights that ESG is not a single decision but a set of strategic choices about how organizations present themselves, what they substantively reflect, and how closely the two are aligned. This dissertation was written in a period of heightened political and regulatory scrutiny of ESG, which has made these issues especially salient and contested in the United States. That context matters because the informational cues examined here may be interpreted differently across time, industries, and institutional environments. Future research could extend this work by testing whether the same patterns hold in settings where ESG is less controversial, more institutionalized, or regulated differently, as well as in periods when stakeholder expectations and political pressures shift. Doing so would help clarify which effects are tied to the specific environment in which organizations operate and which are more general features of how stakeholders respond to ESG-related information.

Committee Chair

Seth Carnahan

Committee Members

Dan Elfenbein; Kate Odziemkowska; Nick Argyres; Oren Reshef

Degree

Doctor of Philosophy (PhD)

Author's Department

Strategy and Entrepreneurship

Author's School

Olin Business School

Document Type

Dissertation

Date of Award

7-28-2026

Language

English (en)

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