In a recent article in Journal of Management Studies, we sought to understand how public attention affects company behavior. We wanted to know, in particular, whether companies in the public eye are more transparent and complete in their environmental disclosures. Below, we introduce public attention, two metaphors for how it operates, and our findings.

What is public attention?

Public attention is the extent to which a company, at a given time, is of popular interest, for example because it has made the news after a scandal or generated buzz for a product launch.

Public attention varies across companies. Some are celebrity firms whose every move is closely followed by the press, while others go unnoticed as smaller, privately held companies that refrain from mass advertising and play niche roles in elaborate supply chains.

That said, public attention tends to be ephemeral. Staying in the limelight is difficult in the age of the Internet and the daily news cycle, when the narrative seems to shift impetuously to the latest thing, be it election interference or artificial intelligence.

Finally, public attention can be valuable. Companies in the public eye benefit, at the very least, from brand recognition, which gives an edge in competitive industries where numerous companies are trying to stand out.

Two Metaphors for Public Attention

Beyond being varied, evanescent, and valuable, public attention can also be described by its effects on company behavior. Here, two metaphors can capture the opposing views in academic and practitioner discourses as to how public attention affects company disclosures.

In the first metaphor, public attention is a “floodlight.” Public attention suggests that a sea of eyeballs has been trained on a company, which threatens to expose any omissions in company disclosures and therefore obviates any need to omit them the first place. If these omissions are then framed as flagrant and deceitful, the company may lose reputation, as allegations of fraud spread throughout a population of already interested citizens.

In the second metaphor, public attention is a “spotlight.” Public attention provides an opportunity for companies to gain broad-based image benefits by playing to the values and expectations of their large, attuned audience. Here, rather than a consequential source of external scrutiny, public attention is a superficial and manipulatable gaze. As such, companies are tempted to respond to public attention by curating their disclosures with socially desirable information, even if it is inaccurate or misleading.

Findings: Selective Disclosure and Strategic Fluffing

We tested these metaphors for public attention in a longitudinal sample of over 600 companies whose environmental disclosures in the Trucost databasewere tracked from 2008-2019. We indicated public attention as the number of yearly news articles in the Bloomberg database that mentioned a company and as the number of visits to the company’s Wikipedia page. We arrived at two main findings.

First, the spotlight thesis prevailed. Companies subject to more public attention engaged in more “selective disclosure,” meaning that the environmental impacts that they reported were associated with relatively light environmental damage as compared to the damage that they actually caused as assessed by Trucost.

Second, we found a mechanism underlying the first finding. Companies in the public eye increased the number of environmental impacts that they disclosed, but not the total dollar value of the impacts associated with those disclosures. We call this “strategic fluffing” to imply that the volume of disclosures has increased, but not their total weight or seriousness.

Strategic fluffing suggests that one way that companies manage public attention is by dividing it across a large set of data points that, collectively, do not portray the company as particularly damaging to the environment. Strategic fluffing ties into complaints that environmental disclosures, these days, contain an excessive amount of information of questionable relevance or helpfulness to academics and activists.

Conclusion and Implications

Our study suggests that there are limits in the extent to which public attention, in itself, can discipline companies to be more transparent. It also raises public attention as a factor that might help to explain why company disclosures, nowadays, seem to be chocked full of relatively immaterial information.

As for the relevance of our study to non-academics, the public may come away from our article with a greater apprenhension that the companies that they follow closely are fully disclosing their most serious environmental impacts. As for activists, they may reconsider whether the common tactic of drawing attention to companies that are poor performers will have the unintended effect of incentivizing companies to curate their disclosures to present themselves in a favorable light before the many eyeballs that are suddenly trained on the company.