Accounting for Human Rights Violations Risk: Conflict Minerals Mandatory Disclosures under the Dodd Frank Act

This paper examines the equity market response to firms’ disclosure of human rights violation risk with regard to conflict mineral usage as required by Section 1502 of the Dodd-Frank Act (the Act). This paper assesses the aggregate equity market response to regulatory events leading to the passage of the Act, the equity market reaction to voluntary early disclosures and mandatory disclosures of conflict mineral information in Form SD, as well as the determinants of the equity market response. Using a sample of 4,399 US registrants from January 1, 2008 to September 30, 2014, we document a significant negative stock market reaction to the passage of the Act and to conflict minerals disclosures on Form SD. The equity market reaction is more negative and limited to companies that source their minerals from conflict zones, companies with human rights violations, and companies with ambiguous disclosures. Taken together, the results of this study provide an economic justification for companies with poor conflict minerals practices to improve in order to avoid high costs that will arise if firms are forced to disclose human rights abuses. This paper also provides preliminary evidence that Form SD is successful in reducing the governance gap that exposes investors to unnecessary sanction, litigation and reputation risk from firms’ activities in conflict minerals usage.

Frank Reynolds fonds, 1967-1975, 1988-1990, 2007, n.d.

Frank Reynolds graduated from Brock University in 1970. While a student at Brock Mr. Reynolds was active in student life, as editor of the student newspaper and as president of the student union. He also produced other student publications, including yearbooks. In 1970 he organized the Rock at Brock, which brought various rock groups to the university campus.

Photograph - Portrait Col. Frank Case McCordick

A portrait photograph of Col. Frank Case McCordick in his military uniform. undated. The photographers are Elliott & Fry and are located at 55 Baker street London W.

Letter - Col. Frank Case McCordick to his wife May McCordick, 1915

A letter from Col. Frank C. McCordick to his wife May dated 24 December 1915. He discusses plans for Christmas dinner in the mess room and decorating the hall with holly. He mentions friends who have sent Christmas cards and asks about his daughter Doris.

Photograph - Col. Frank C. McCordick

A photograph of Col. Frank C. McCordick in military uniform standing in a field. The reverse of the photograph reads "Copies of this photograph can be obtained from The Rembrandt Studio, 207 Cuthbertson Block Fort William, Ont, When ordering please quote 402."

Letter - Col. Frank C. McCordick to daughter Doris

A letter from Col. Frank C. McCordick to his daughter, no date is provided, but it is sometime shortly after Christmas. He asks about Christmas gifts and mentions items he has sent her from Christmas.

Printed blank from Frank Pearce and Co. Shipping and Insurance Agents

Printed blank from Frank Pearce and Co. Shipping and Insurance Agents regarding the bill of landing for the porcelain cask, Oct. 26, 1876.

Printed blank from Frank Pearce and Co. regarding charges for shipping of the porcelain cask

Printed blank from Frank Pearce and Co. regarding charges for shipping of the porcelain cask, Oct. 26, 1876.