ESG Performance and CEO Dismissal: Moderating Role of State-Owned Enterprises and Ownership Concentration

Dong Shao, TieZhu Sun and Yechi Ma

Emerging Markets Finance and Trade, 2025, vol. 61, issue 10, 3022-3035

Abstract: We explores how environmental, social, and governance (ESG) performance affects the likelihood of chief executive officer (CEO) dismissal. Using a sample of listed Chinese firms from 2011–2021, we find that better ESG performance reduces the probability of CEO dismissal; however, this correlation is weaker in state-owned enterprises and firms with concentrated ownership. ESG performance significantly protects CEOs’ positions in poorly performing firms or those receiving negative performance feedback. Mechanism analyses indicate that ESG performance operates by attracting more analyst coverage and easing financial constraints. Focal firms’ ESG performance have spillover effects on peer firms’ voluntary disclosure by reducing the likelihood of CEO dismissal, especially in the industrial sector.

Date: 2025
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DOI: 10.1080/1540496X.2024.2402930

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