Abstract. Social movements impose costs on organizations by disrupting stakeholder relationships and by intensifying formal legal punishment. While the former has received substantial scholarly attention, less is known about how movements reshape the severity of punishment at the point of legal enforcement through the evaluative processes of lay decision-makers. We argue that movements activate the expressive function of the law, reshaping how ordinary citizens serving on civil juries interpret and respond to misconduct. By heightening the moral urgency of contested behaviors and activating collective outrage, movements alter the cultural lens through which juries assess culpability and assign punishment, translating diffuse public sentiment into coercive legal consequences for organizations. In civil litigation, these dynamics are most visible in punitive damages: discretionary sanctions that allow juries to translate social condemnation into material penalties that vary with local conditions. We test these arguments using a difference-in-differences analysis of jury verdicts in employment discrimination cases adjudicated before and after the emergence of the #MeToo Movement in October 2017. Punitive damages in sexual harassment cases increased substantially following #MeToo, particularly in jurisdictions with greater movement-related social media discourse and partisan alignment. These findings reveal that legal sanctions are socially constructed through evaluative processes that movements can reshape, exposing organizations to liability costs that vary with the cultural and political character of the communities in which they operate.

Abstract. Conventional accounts expect stakeholder and investor responses to track the valence of corporate conduct, with responsible actions generating positive responses and irresponsible actions negative responses. We challenge this by integrating expectation-confirmation theory with cognitive psychology to argue that sentiment shocks—abnormal deviations in stakeholder affect relative to firm-specific expectations—are the operative investor signal. While expectancy-confirming events are financially muted, violations prompt reappraisal. We introduce Cumulative Abnormal Media Sentiment (CAMS), a firm-specific sentiment shock measure analogous to Cumulative Abnormal Returns, validated by replicating and extending Flammer’s (2013) environmental event study through 2024. We find that sentiment shocks predict stock price reactions, though the weight investors assign is conditional on environmental reputation. Specifically, sentiment shocks carry inconsistent weight where reputation creates interpretive ambiguity, and differentiated responses where it does not.

Funded by the Mack Institute for Innovation Management, The Wharton School, University of Pennsylvania

Abstract. When is a leader’s misconduct attributed to the organization rather than the individual responsible? Prior research identifies asymmetry in misconduct attribution: evaluators more readily blame individuals than organizations, which are perceived as lacking a “culpable mind.” I theorize that this pattern shifts when an implicated leader is tightly linked to organizational identity, creating a reputational form of key-man risk. Evaluators use the leader’s identity as a lens through which to interpret the organization itself, causing fault attribution to spill over from the individual to the organization. I further argue that remediation across person, policy, and structural dimensions determines the persistence of this spillover. Drawing on over 100 executives terminated for workplace sexual misconduct (2010-2025) and validated against approximately 400 surprise CEO departures among the S&P 1500 (2010-2024), I find that organizations with greater exposure to key-man reputational risk experience stronger and more persistent spillover following succession, and that firms can attenuate this spillover through substantive person and policy remediation. These findings unpack the cognitive mechanisms underlying evaluative spillover and clarify when remediation effectively decouples firm identity from a departing leader’s character.

Funded by the Zicklin Center for Governance & Business Ethics at the Impact, Value , and Sustainable Business Initiative, The Wharton School, University of Pennsylvania