Using charitable donations to rebuild corporate reputation following controversies

We examine the consequences of controversies on corporate reputation and identify a strategy that companies often adopt to restore their trust relationships with stakeholders in the aftermath of media condemnation. In the post-controversy period, firms appear to use a bolstering strategy of engaging more actively in philanthropic activities. In terms of regaining reputation, as measured by the increase in the Britain’s Most Admired Companies ranking, such strategy proves to be ineffectual. This may be because charitable giving in such context could be viewed as superficial virtue signaling rather than a fundamental change in the company’s ethical stance.