Corporate Social Responsibility and Managerial Entrenchment

Giovanni Cespa and Giacinta Cestone ()
Additional contact information
Giacinta Cestone: University of Salerno, CSEF and CEPR

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: When stakeholder protection is left to the voluntary initiative of managers, relations with social activists may become an effective entrenchment strategy for inefficient CEOs. We thus argue that managerial turnover and firm value are increased when explicit stakeholder protection is introduced so as to deprive incumbent CEOs of activists’ support. This finding provides a rationale for the emergence of specialized institutions (social auditors and ethic indexes) that help firms commit to stakeholder protection even in case of managerial replacement. Our theory also explains a recent trend whereby social activist organizations and institutional shareholders are showing a growing support for each others’ agenda

Keywords: Corporate Governance; Corporate Social Responsibility; Managerial Entrenchment; Social Activism; Stakeholders (search for similar items in EconPapers)
JEL-codes: G34 G38 (search for similar items in EconPapers)
Date: 2007-01-01
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-fmk and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (199)

Published in Journal of Economics and Management Strategy, 2007, 16 (3), pages 741-771

Downloads: (external link)
http://www.csef.it/WP/wp173.pdf (application/pdf)

Related works:
Working Paper: Corporate Social Responsability and Managerial Entrenchment (2015)
Journal Article: Corporate Social Responsibility and Managerial Entrenchment (2007)
Working Paper: Corporate Social Responsibility and Managerial Entrenchment (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:173

Access Statistics for this paper

More papers in CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Maria Carannante ().