Witold Henisz

Witold Henisz
  • Vice Dean and Faculty Director, ESG Initiative
  • Deloitte & Touche Professor of Management in Honor of Russell E. Palmer, former Managing Partner

Contact Information

  • office Address:

    3107 SH-DH
    3620 Locust Walk
    Philadelphia, PA 19104

Research Interests: political and social risk identification and management, materiality of Environment, Social & Governance (ESG) factors, stakeholder engagement, business & socio-political conflict, project management, rise and fall of neoliberalism

Links: CV, Corporate Diplomacy LinkedIn Group, Corporate Diplomacy Portal, Wharton Political Risk Lab, ESG Analytics Lab

Overview

Witold J. Henisz is the Vice Dean and Faculty Director of the ESG Initiative and Deloitte & Touche Professor of Management in Honor of Russell E. Palmer, former Managing Partner, at The Wharton School, The University of Pennsylvania. He received his Ph.D. in Business and Public Policy from the Haas School of Business at University of California, Berkeley and previously received a M.A. in International Relations from the Johns Hopkins School of Advanced International Studies.

His research examines the impact of political hazards as well as environmental, social and governance factors more broadly on the strategy and valuation of global corporations. This work analyzes best practices in corporate diplomacy to win the hearts and minds of external stakeholders as well as the measurement and valuation thereof. His most recent work focuses on the application of alternative data to the measurement of non-traditional political and ESG risks and opportunities and their financial and operational impact on multinational firms as well as the performance of the asset managers that invest in them. His research has been published in top-ranked journals in international business, management, international studies and sociology. He served as a Departmental Editor at The Journal of International Business Studies and as an Associate Editor at Strategic Management Journal. He is a Fellow of the Academy of International Business.

Witold has won multiple teaching awards at the graduate and undergraduate levels including being named Iron Prof, 2019 and an Aspen Institute Ideas Worth Teaching Award Winner, 2020 for his elective courses that highlight the importance of integrating a deep understanding of political and social risk factors into the design and valuation of an organization’s global strategy. These courses incorporate multiple cases that he has authored as well as capstone KEROVKA crisis management simulation for which he served as the academic co-Director. He led the redesign of the required global management content in the Wharton core curriculum. He teaches extensively on the topic of ‘Corporate Diplomacy: Building Reputations and Relationships with External Stakeholders’ as well as ESG integration in open enrollment and custom executive education programs.

He is currently a principal in the consultancy PRIMA LLC whose clients span multinational firms, asset managers, intergovernmental organizations and non-governmental organizations including Anglo Gold Ashanti, Dundee Precious Metals, EastWestRail, Eaton Vance, Engine No 1, Gabriel Resources, Lockheed Martin, Rio Tinto, Shell Corporation, the World Bank, the Inter-American Development Bank, the International Finance Corporation and the World Wildlife Fund. He previously worked for The International Monetary Fund.

Summary of Research Papers and Downloads

Download POLCON Database (2022 release (with data to 2021) now available)

Consider using the CHECKS index of the Database of Political Institutions of the World Bank as a robustness check.
For more information on the relative strength and weaknesses of these and other datasets see the following external overviews: http://siteresources.worldbank.org/INTLAWJUSTINST/Resources/IndicatorsGovernanceandInstitutionalQuality.pdf
http://siteresources.worldbank.org/INTMOVOUTPOV/Resources/2104215-1148063363276/071503_Munck.pdf
http://www.nsd.uib.no/macrodataguide/topic.html
http://www.isadiscussion.com/view/0/datasets.html

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Research

  • Christopher Bruno and Witold Henisz (2024), Environmental, Social, and Governance (ESG) Outcomes and Municipal Credit Risk, Business & Society, 63 (8), pp. 1709-1756. Abstract

    We investigate the association between a wide range of community-level environmental, social, and governance (ESG) outcomes and the credit risk of U.S. municipal finance fixed-income securities. We develop a novel dataset of multiple ESG outcomes for U.S. counties and connect it to a 2001-2020 panel of municipal bonds issued within those counties. Overall, we find supportive evidence that collective increases in community-level ESG factors (i.e., ESG outcomes) are associated with reductions in credit risk for U.S. municipal finance instruments over time. We theorize that these associations arise from variations in investor perceptions and manifested changes in fiscal health over time as a function of changing ESG outcomes. Post hoc analyses leveraging quasi-exogenous shocks to uncertainty, as well as connecting ESG outcomes to various measures of fiscal health at the county-year level, and credit ratings at the bond-year level, help validate this theory. Our research suggests that even socially agnostic investors should investigate the environmental and social performance of a municipality as part of their credit due diligence.

  • Kevin Chuah, Witold Henisz, James McGlinch (Under Review), Greenwash or Green: Does Bluffing or Impact Attract Inflows into ESG Equity Funds?.
  • Katarzyna (Kate) Odziemkowska and Witold Henisz (Forthcoming), Webs of Influence: National Stakeholder Fields and Corporate Social Performance. Abstract

    We analyze the relationship between the actions and interactions of secondary stakeholders with an interest in corporate social performance (CSP) and variation in firm-level CSP across countries. Our work represents a significant theoretical shift in research exploring comparative CSP, which, to date, has focused on cross-national variation in institutions. We propose that stakeholders can also drive cross-country heterogeneity in CSP by influencing the salience of the issues for which they advocate. Stakeholders raise salience of CSP issues through their interactions with important sociopolitical actors within a country, signaling their collective ability to change expectations on CSP. CSP issue salience is also heightened where heterogeneous stakeholder groups advocate for CSP issues, signaling that issues have garnered widespread acceptance or legitimacy. Managers are also more attuned to the urgency of issues through the direct actions that stakeholders take against firms in the country. We also argue and find that these effects are moderated by interstakeholder interactions, which signal the degree of consensus among stakeholders on issues and their ability to mobilize repeatedly against firms. We draw on a novel data set of 250 million media-reported events to identify secondary stakeholders with interests in the environmental and social issues that constitute CSP, their direct actions against firms, and their interactions with important sociopolitical actors and each other. We show empirically that variation in secondary stakeholder actions and interactions between countries, and within countries over time, is associated with differences in firm-level CSP among a sample of 2,852 firms spanning 36 countries from 2004 to 2013.

  • James McGlinch and Witold Henisz (Under Review), Reexamining the Win-Win: Relational Capital, Stakeholder Issue Salience, and the Contingent Benefits of Value Based Environmental, Social and Governance (ESG) Strategies.
  • Witold Henisz and James McGlinch (2019), ESG, Material Credit Events, and Credit Risk, Journal of Applied Corporate Finance. Abstract

    A growing body of research has extended the analysis of the materiality of ESG criteria from the perspective of equity investors to creditors. Past research and analysis have demonstrated the link between better management of ESG criteria and better management of risk overall. Despite this growing consensus and consistent evidence that ESG performance is correlated with credit risk, no empirical evidence has yet linked ESG performance to cost or expense variances or revenue shortfalls that could explain these correlations.

    The authors attempt to address this lack of mechanism‐based empirical evidence by citing and then building on a number of well‐publicized cases with analysis of two major ESG issues—indigenous land claims and biodiversity—as they affect the global project finance and agriculture sectors. Broadening these single‐sector results, the authors use a novel dataset providing systematic coding of material events reported in the media across a variety of empirical settings to produce the first large‐sample empirical evidence of the mechanisms linking ESG performance to credit risk.

  • Ruth Aguilera, Witold Henisz, Joanne Oxley, J. Myles Shaver (2019), Special Issue Introduction: International Strategy in an Era of Global Flux, Strategy Science, 4 (2), pp. 61-69.
  • Witold Henisz and Edward Mansfield (2019), The Political Economy of Financial Reform: De Jure Liberalization vs. De Facto Implementation, International Studies Quarterly, 63 (3), pp. 589-602. Abstract

    Over the past three decades, numerous countries have engaged in financial reform, prompting widespread interest in the sources of this development. Virtually all of the studies conducted on this topic, however, have focused on explaining neoliberal policy adoption in the financial sector, without addressing whether the adopted reforms actually generate neoliberal economic outcomes. This gap in the literature is important because many policy reforms are not implemented or enforced. In this article, we conduct one of the first studies of the conditions under which de jure financial reforms are implemented, yielding de facto financial liberalization. We argue that democracy inhibits de facto financial reform when society at large is dissatisfied with government. Under these circumstances, democratic officials may be tempted to announce but not to follow through on financial policy liberalization or be unable to follow through, either fearing or facing opportunistic political opposition from legislative or partisan veto players who either represent or seek the electoral support of interest groups harmed by implementing financial reforms. Based on an analysis of ninety countries from 1980–2005 corroborated by a series of illustrative case studies, we find considerable support for this argument.

  • Witold Henisz, Dhruv Malhotra, Robin Nuttal, A new measure to assess companies’ external engagement in London School of Economics Blog,.
  • Witold Henisz and Rachelle Sampson, Redesigning Management Education for the Long-Term in Stanford Social Innovation Review,.
  • Lite Nartey, Witold Henisz, Sinziana Dorobantu (2018), Status Climbing Versus Bridging: Multinational Stakeholder Engagement Strategies, Strategy Science, 3 (2), pp. 367-392. Abstract

    Multinational corporations seeking to overcome the “liability of foreignness” through partnerships with stakeholders in their overseas markets face an important tension in choosing between two alternative strategies. Firms who build relationships with high-status local stakeholders may experience increased cooperation and reduced conflict with other stakeholders. However, the short-term benefits of this status climbing strategy may be difficult to sustain because stakeholders with low-status, particularly those outside the formal political structure, are more likely to increase their conflict as the firm becomes increasingly distant from them. An alternative strategy of bridging structural holes in the host country stakeholder network also faces theoretical limits as access to scarce information and resources is likely to engender conflict with other stakeholders. The status climbing strategy is more attractive where insider connections dominate (i.e., the rule of law is weak) while the bridging strategy is more attractive in countries with stronger rule of law. In other words, as the rule of law strengthens, we show that multinational entrants focus more on what they know rather than whom they know. Our analyses use a hand-coded dataset of almost 52,000 media-reported stakeholder interactions that capture the network of relationships among 4,623 stakeholders from 19 gold-mining companies operating 26 mines in 20 countries, and the evolution of these networks from 1993 until 2008.

  • All Research from Witold Henisz »

Teaching

Current Courses

  • MGMT2090 - The Political Environment Of The Multinational Firm

    The share of executives, board members, and investment managers who consider climate risk, racial justice and other ESG issues as well as stakeholder’s opinions of the firm to be material to their business decisions has risen dramatically. If this business case for engagement with stakeholders on ESG issues can be demonstrated to mainstream investors, pools of capital can be mobilized to harness grand societal challenges. However, executives, board members, and investment managers are actually growing less confident in the ESG data available to guide capital allocations and strategic decisions. ESG scores have been demonstrated to be unreliable, incomplete and biased and often lean on outdated and/or incomplete information obtained through voluntary unaudited disclosure. This course provides students the latest tools to assess and map stakeholder opinions as well as integrate them into financial valuation. It also offers behavioral skills critical for stakeholder engagement including trust building, strategic communications and shaping organizational culture. In short, it prepares students to engage in Corporate Diplomacy (i.e., to influence external stakeholders’ opinions of the acceptability of a company’s operations at a moment in time and to convince internal stakeholders to adapt their behaviors, systems and outputs` when necessary to support an organizational mission).

    MGMT2090001 ( Syllabus )

  • MGMT7200 - Corporate Diplomacy

    The share of executives, board members, and investment managers who consider climate risk, racial justice and other ESG issues as well as stakeholder’s opinions of the firm to be material to their business decisions has risen dramatically. If this business case for engagement with stakeholders on ESG issues can be demonstrated to mainstream investors, pools of capital can be mobilized to harness grand societal challenges. However, executives, board members, and investment managers are actually growing less confident in the ESG data available to guide capital allocations and strategic decisions. ESG scores have been demonstrated to be unreliable, incomplete and biased and often lean on outdated and/or incomplete information obtained through voluntary unaudited disclosure. This course provides students the latest tools to assess and map stakeholder opinions as well as integrate them into financial valuation. It also offers behavioral skills critical for stakeholder engagement including trust building, strategic communications and shaping organizational culture. In short, it prepares students to engage in Corporate Diplomacy (i.e., to influence external stakeholders’ opinions of the acceptability of a company’s operations at a moment in time and to convince internal stakeholders to adapt their behaviors, systems and outputs` when necessary to support an organizational mission).

    MGMT7200001 ( Syllabus )

Past Courses

  • INTS7210 - Gbl Bus through Humanities

    Drawing on theories within the fields of international relations, international law, and international political economy, plus history, this course equips students with insight into the legal, economic, and historical legacies that are important to understanding the nature of global business today.

  • MGMT2090 - Pol & Soc Environ of Mm

    The share of executives, board members, and investment managers who consider climate risk, racial justice and other ESG issues as well as stakeholder’s opinions of the firm to be material to their business decisions has risen dramatically. If this business case for engagement with stakeholders on ESG issues can be demonstrated to mainstream investors, pools of capital can be mobilized to harness grand societal challenges. However, executives, board members, and investment managers are actually growing less confident in the ESG data available to guide capital allocations and strategic decisions. ESG scores have been demonstrated to be unreliable, incomplete and biased and often lean on outdated and/or incomplete information obtained through voluntary unaudited disclosure. This course provides students the latest tools to assess and map stakeholder opinions as well as integrate them into financial valuation. It also offers behavioral skills critical for stakeholder engagement including trust building, strategic communications and shaping organizational culture. In short, it prepares students to engage in Corporate Diplomacy (i.e., to influence external stakeholders’ opinions of the acceptability of a company’s operations at a moment in time and to convince internal stakeholders to adapt their behaviors, systems and outputs` when necessary to support an organizational mission).

  • MGMT6110 - Managing Est Enterprise

    This course is about managing large enterprises that face the strategic challenge of being the incumbent in the market and the organizational challenge of needing to balance the forces of inertia and change. The firms of interest in this course tend to operate in a wide range of markets and segments, frequently on a global basis, and need to constantly deploy their resources to fend off challenges from new entrants and technologies that threaten their established positions. The class is organized around three distinct but related topics that managers of established firms must consider: strategy, human and social capital, and global strategy.

  • MGMT7150 - Pol & Soc Environ of Mm

    All successful firms go global. This course provides a broad introduction to international business. You will learn about who loses and who gains from trade, what are the effects of tariffs and non-tariff barriers, the World Trade Organization (WTO), regional trading blocs, and NAFTA. The course then turns to the international financial architecture, focusing on exchange rate risk. We then move to multinational firm strategies, including a discussion of the reasons for why firms choose to do business globally through trade or FDI, international tax strategy, joint ventures, technology transfer, different ways to be a multinational firm, and ethical dilemmas. The class is a mix of lectures and cases that allow students to synthesize the extensive materials on multinational management, international institutions, economic policies, and politics with a goal towards formulating multinational firm strategy.

  • MGMT7200 - Corporate Diplomacy

    The share of executives, board members, and investment managers who consider climate risk, racial justice and other ESG issues as well as stakeholder’s opinions of the firm to be material to their business decisions has risen dramatically. If this business case for engagement with stakeholders on ESG issues can be demonstrated to mainstream investors, pools of capital can be mobilized to harness grand societal challenges. However, executives, board members, and investment managers are actually growing less confident in the ESG data available to guide capital allocations and strategic decisions. ESG scores have been demonstrated to be unreliable, incomplete and biased and often lean on outdated and/or incomplete information obtained through voluntary unaudited disclosure. This course provides students the latest tools to assess and map stakeholder opinions as well as integrate them into financial valuation. It also offers behavioral skills critical for stakeholder engagement including trust building, strategic communications and shaping organizational culture. In short, it prepares students to engage in Corporate Diplomacy (i.e., to influence external stakeholders’ opinions of the acceptability of a company’s operations at a moment in time and to convince internal stakeholders to adapt their behaviors, systems and outputs` when necessary to support an organizational mission).

  • MGMT9550 - Foundations Mult Mgmt.

    The goal of the course is to provide you with a foundation in some of the major research areas that underpin the study of Multinational Management. International Business (and the study of MNCs) is an interdisciplinary field. As such, our survey of the seminal articles in the field will span a number of different theoretical and empirical approaches (i.e., economic, managerial, organizational and institutional). Much of our seminar discussions will focus on identifying and developing interesting research questions raised by this interdisciplinary literature, which offers many opportunities for systematic empirical study.

  • MGMT9600 - Non-Market Strategy

    This course builds on the foundational material presented in MGMT 955 with a deeper focus on current research examining institutional influences on multinational management. These include regulative supports (e.g., laws, regulations, contracts and their enforcement through litigation, arbitration of incentive compatible self-regulation) but also normative (e.g., socially shared expectations of appropriate behavior, and social exchange processes) and cognitive (e.g., creating shared identity to bridge differences in values, beliefs and framing) elements of the institutional environment. We will examine not only strategic responses in the market environment but also influence strategies of multinational and domestic firms that seek to alter the institutional environment in which they operate. We will draw not only upon the international business literature but also related literatures including political economy, sociology, law, finance, communications, institutional theory, strategic corporate social responsibility, social movements, network theory and the management of extractive industries.

  • MGMT9700 - Research Methods in Mgmt

    Students taking the course will be introduced to the seminal readings on a given method, have a hands-on discussion regarding their application often using a paper and dataset of the faculty member leading the discussion. The goal of the course is to make participants more informed users and reviewers of a wide variety of methodological approaches to Management research including Ordinary Least Squares, Discrete Choice, Count Models, Panel Data, Dealing with Endogeneity, Survival/failure/event history and event studies, experiments, factor analysis and structural equation modeling, hierarchical linear modeling, networks, comparative qualitative methods, coding of non-quantitative data, unstructured text and big data simulations.

Awards And Honors

  • Excellence in Teaching Award, 2021
  • Excellence in Teaching Award, 2020
  • Aspen Institute Ideas Worth Teaching Award, 2020
  • Excellence in Teaching Award, 2019
  • Industry Studies Association Ralph Gomory Best Industry Studies Paper Award, 2019
  • Iron Prof, 2019
  • Excellence in Teaching Award (Electives), Wharton MBA Program, 2018
  • Fellow of Academy of International Business, 2018
  • Teaching Commitment and Curricular Innovation Award, Wharton MBA Program, 2015
  • Best Conference Paper Prize at Strategic Management Society Annual Meeting, 2013
  • Helen Kardon Moss Anvil Award Nomination, 2013
  • Helen Kardon Moss Anvil Award Nomination, 2012
  • Excellence in teaching award, MBA Division (elective), 2012
  • Nominated for Best Paper for Practical Implications at the 2011 Strategic Management meeting, 2011
  • Teaching Commitment and Curricular Innovation Award, 2011
  • Helen Kardon Moss Anvil Award Nomination, 2011
  • Finalist, Best Applied Paper in International Management (The Robert H. Schaffer Award) at the 2011 Academy of Management meeting, San Antonio TX, 2011
  • Best Paper 2010 Engineering Project Organization Conference, South Lake Tahoe, CA, 2010
  • Excellence in teaching award, Wharton Undergraduate Division, May, 2008
  • Excellence in teaching award, Wharton Undergraduate Division, May, 2007
  • Finalist, Aspen Institute’s 2006 Faculty Pioneer Award (one of eight finalists out of 100 nominees), 2006
  • Faculty teaching award (electives), MBA for Executives Program, Class 31East, 2006
  • Bronze Prize ($10,000) in International Finance Corporation / Financial Times 2006 Essay Competition on Topic of “Business and Development: The Private Path to Prosperity” (one of six prize winning essays out of over 500 submissions in total), 2006
  • First Runner Up, Haynes Prize for Outstanding Scholar in International Business under the age of 40 at 2005 Academy of International Business Annual Conference, 2005
  • Outstanding Reviewer Award, International Management Division, Academy of Management (one of 38 out of 656 reviewers so recognized), 2005
  • Faculty teaching award (electives), MBA for Executives Program, Class 28East, 2004
  • Finalist, Haynes Prize for Best Paper by a scholar under the age of 40 at 2002 Academy of International Business Annual Conference, 2002
  • Finalist, Best Paper at 2002 Academy of International Business Annual Conference, 2002
  • Outstanding Reviewer Award, International Management Division, Academy of Management, 2000 (one of 8 out of 250 reviewers so recognized), 2000
  • Richard N. Farmer Award for best dissertation in International Business, Academy of International Business, 1999
  • Finalist, The Free Press Doctoral Dissertation Award, Business Policy and Strategy Division, Academy of Management, 1999
  • Best Doctoral Student Paper, Telecommunications Policy Research Conference, 1998

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Latest Research

Christopher Bruno and Witold Henisz (2024), Environmental, Social, and Governance (ESG) Outcomes and Municipal Credit Risk, Business & Society, 63 (8), pp. 1709-1756.
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Lessons from COVID-19: Health Care’s Progress and Shortcomings Five Years Later

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Knowledge @ Wharton - 2025/03/12
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Awards and Honors

Excellence in Teaching Award 2021
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