FT article on annual reports cites study
A thought-provoking reference to a study co-authored by London Business School’s Assistant Professor of Strategy and Entrepreneurship Aharon Cohen-Mohliver has appeared in a recent FT opinion article.
The article, Annual reports are fast becoming political treatises (FT Opinion, July 26th), written by the FT’s International Business Editor, Peggy Hollinger, makes reference to the recent study from Cohen-Mohliver, LBS Professor of Strategy and Entrepreneurship, Donal Crilly, and Carlson School of Management’s Professor, University of Minnesota, Aseem Kaul.
The study, ‘Corporate social counterpositioning: How attributes of social issues influence competitive response’, Strategic Management Journal, Volume44, Issue5, May 2023, reveals the potential for social counter-positioning, where rival companies take advantage of socio-political polarisation to horizontally differentiate.
In reference to this academic work, and Hollinger’s own investigation into whether annual reports are evolving, as companies feel increasingly compelled to take political positions, Hollinger draws inspiration from the study and speaks to Dr Cohen-Mohliver. Hollinger writes: “Companies that came in highest or lowest on a well-known ranking of LGBTQ policies were rewarded by investors with share-price rises, while those in the middle were ignored. It was not about who had the most inclusive policies, but who had the clearest position.
“Not taking a position will make both sides hate you,” says Cohen-Mohliver, co-author of the study. “People have to believe you are sincere and for that you have to bear some cost by using language that is very strong and clear.”
There are obvious risks in taking public positions on these issues, as companies such as Disney have discovered, observes Hollinger, yet Dr. Mohliver believes more companies will be willing to do so in future in order to differentiate themselves from rivals. “The more you see companies take a position on one side, the more the market opportunity increases for taking a position on the other side,” he says”.
