ESG and CEO turnover around the world

Gonul Colak, Timo P. Korkeamäki and Niclas Oskar Meyer

Journal of Corporate Finance, 2024, vol. 84, issue C

Abstract: We investigate whether CEOs around the world are held accountable for stakeholder-related corporate misbehavior. The likelihood of CEO turnover increases significantly when the media coverage of the ESG incidents reaches extreme levels. CEO turnovers occur even in the cases where an incident does not lead to a stock price decline. In such cases, the board likely has a non-pecuniary motive for the turnover. This suggests that such non-pecuniary reputational concerns are an important determinant of CEO turnover decisions around the world, especially when the firm is facing intense public pressure due to stakeholder-related corporate misbehavior. This effect is more pronounced when firms are headquartered in stakeholder-oriented countries like many European countries.

Keywords: ESG risk; CEO turnover; Shareholder value maximization; Pecuniary costs; Non-pecuniary considerations (search for similar items in EconPapers)
JEL-codes: G15 G30 M12 M14 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:84:y:2024:i:c:s0929119923001724

DOI: 10.1016/j.jcorpfin.2023.102523

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