Corporate Virtue Signaling: The Devolution of Virtue into Signaling

Abstract

This paper examines the complex phenomena of corporate virtue signaling, tracing it through the roots of Aristotelian virtue and evolution during the growth of utility theory, increased focus on economic wealth, and conflicting views on the purpose of a corporation. As virtue signaling becomes a staple in corporate publicity, the phenomenon warrants examination of if it is truly virtuous, aligns with corporate objectives, and fosters social benefits. Corporate virtue signaling lacks essential requirements of true virtue, but on a case-by-case basis signaling can provide, or fail to provide, useful benefits to corporations and society. While a consistent and intentional corporate signaling strategy is most likely to be successful, the private and public gains associated with corporate virtue signaling are not guaranteed. Signaling is a double-edged sword able to harm both companies and the public through poorly executed campaigns. The increased focus on stakeholder objectives may point to stakeholder theory itself being a virtue signal that can insulate executives from claims of mismanagement, increasing their ability to serve themselves rather than stakeholders and shareholders. Additionally, the analysis of virtue compared to the corporate signaling trend prompts the consideration of what people can and should expect from corporations.