CEO Ability and Corporate Social Responsibility

Yuan Yuan (), Gaoliang Tian (), Louise Yi Lu () and Yangxin Yu ()
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Yuan Yuan: Xi’an Jiaotong University
Gaoliang Tian: Xi’an Jiaotong University
Louise Yi Lu: Australian National University
Yangxin Yu: City University of Hong Kong

Journal of Business Ethics, 2019, vol. 157, issue 2, No 7, 411 pages

Abstract: Abstract This study examines the impact of chief executive officer (CEO) ability on firms’ corporate social responsibility (CSR) performance. We find that firms’ CSR performance increases with CEO ability. Specifically, firms with more able CEOs are associated with more socially responsible activities and fewer socially irresponsible activities, and are associated with more stakeholder CSR rather than third-party CSR. We further find that the positive relation between CEO ability and CSR is weakened for CEO who is also the chair of the board and for CEO who is close to retirement; and is weakened when the CSR emphasis exerted by a firm’s external environment is high. Our results are robust after controlling for firm fixed effects and to the use of multiple measures of CSR performance and CEO ability. Overall, our evidence is consistent with our conjecture that more able CEOs have less career concerns so that these CEOs are more willing to undertake long-term investments in socially beneficial activities, leading to better CSR performance.

Keywords: CEO ability; Career concerns; Corporate social responsibility; Long-term investment; CSR emphasis (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10551-017-3622-3

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