Former CEOs chairing the board: does it matter to corporate social and environmental investments?

Vu Quang Trinh (), Aly Salama (), Teng Li (), Ou Lyu () and Savvas Papagiannidis ()
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Vu Quang Trinh: Newcastle University
Aly Salama: Northumbria University
Teng Li: Newcastle University
Ou Lyu: Bank of China
Savvas Papagiannidis: Newcastle University

Review of Quantitative Finance and Accounting, 2023, vol. 61, issue 4, No 4, 1277-1313

Abstract: Abstract Former CEOs who stay on the board as Chairmen (i.e., Chair-Former-CEO or CFCEO) often play a vital role in monitoring and advising the incumbent CEOs. However, their influence on firm performance remains under-investigated. This paper aims to offer new insights into the impact that such a role can have by examining corporate investment in social and environmental responsibility. It examines the effect of CFCEOs on the firm’s social and environmental responsibility of 1,263 S&P1500 firms from 2002 to 2021. We find that firms with the presence of a CFCEO exhibit superior social and environmental performance. This finding suggests that CFCEOs can encourage long-term value creation for a broader range of stakeholders by building social capital and public trust. Additional analyses reveal that the positive association between the CFCEO and firms’ social and environmental performance was more pronounced during the COVID-19 pandemic than during the global financial crisis of 2007-9.

Keywords: Chair-Former-CEO; Corporate social responsibility; COVID-19; Crisis; Social capital; C23; G01; G21; G28; L50; M41 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11156-023-01184-x

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