A new study released last week from Paul Griffin, a professor in the UC Davis Graduate School of Management, claims that shareholder value has suffered in response to past (voluntary) public disclosures on conflict minerals. The release summary from Phys.org stated:
Griffin and his research team examined 206 companies from December 2010 through March 2012 and found those companies — half who had voluntarily disclosed before the law became mandatory — lost $6.5 billion in shareholder value due to declining equity values. Both disclosing and nondisclosing companies were affected because of the ripple effect in capital markets when uncertainties arise about a particular business practice — using conflict minerals, in this case.
The study methodology claims to correct for other factors possibly influencing stock pricing before and after such disclosures. Elm’s analysis of the impact of the 2010 Enough company rankings on corporate revenues was cited within the study, although Professor Griffin acknowledged the differing parameters and goals of the respective studies.
We have only begun our review of Griffin’s study (given its timing, our plate has been full with the final SEC rule) and hope to have more detailed commentary soon.