Document Type

Article

Abstract

Business Roundtable (BRT) firms have faced intense scrutiny from investors, media, and the public following their 2019 “Statement on the Purpose of a Corporation,” which marked a shift from shareholder-centric governance to a stakeholder-focused approach. This shift has sparked debate over whether BRT firms are genuinely committed to social responsibility or merely using it as a branding strategy without implementing meaningful changes. This paper contributes to the debate by empirically examining a key dimension of social responsibility—corporate tax behavior. Using a difference-in-difference analysis covering 2004–2022, we find that BRT firms engage in higher levels of tax avoidance than other publicly listed U.S. firms. More importantly, our results indicate that BRT firms have not significantly adjusted their tax behavior since the 2019 Statement, suggesting a disconnect between their stated commitment and actual practices. Our findings provide new insights into the social responsibility of BRT firms and contribute to the broader literature on the relationship between corporate tax avoidance and CSR.

Digital Object Identifier (DOI)

https://doi.org/10.1111/beer.12804

Rights

© 2025 The Author(s). Business Ethics, the Environment & Responsibility published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivsLicense, which permits use and distribution in any medium, provided the originalwork is properly cited, the use is non-commercial and no modifications or adaptations are made.

APA Citation

El Ghoul, S., Guedhami, O., & Jamshed, R. (2025). Redefining purpose: The effect of the 2019 business roundtable statement on corporate tax strategies. Business Ethics, the Environment &Amp; Responsibility, 35(2).https://doi.org/10.1111/beer.12804

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