Financial experts of top management teams and corporate social responsibility: evidence from China

Zhe Li (), Bo Wang () and Dan Zhou ()
Additional contact information
Zhe Li: Queen Mary University of London
Bo Wang: University of Southampton, Highfield Campus
Dan Zhou: University of Reading

Review of Quantitative Finance and Accounting, 2022, vol. 59, issue 4, No 3, 1335-1386

Abstract: Abstract This study examines how the financial experience of senior executives influences corporate social responsibility (CSR) performance and reporting activities. With a sample of Chinese listed companies over the period 2009–2018, we find that companies with senior executives with financial expertise are associated with higher CSR performance and tend to issue lengthier sustainability reports than companies without; in addition, the percentage of financial experts on the top management team (TMT) is positively related to CSR. We next find that such improvement in CSR is mainly driven by senior executives who have work experience in regulatory-oriented financial institutions. By examining the role of the TMT’s latitude of action, we find that the positive influence of senior executives’ financial experience on CSR is more pronounced in non-state-owned enterprises and in cash-abundant companies. Last, further analysis demonstrates that the enhancement in CSR driven by financially sophisticated executives drives firm value. The results are robust to alternative measures, sensitivity tests, and various controls for endogeneity concerns.

Keywords: Financial experience; Top management team; Corporate social responsibility; Sustainability; Firm value (search for similar items in EconPapers)
JEL-codes: G30 G41 L25 M12 M14 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11156-022-01077-5

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