CEO turnover is a critical event in an organization that influences organizational processes and performance. The objective of this study is to investigate whether workforce diversity might have a resilience effect on firm performance under the frequency of CEO turnover. Based on a sample of 409 Korean firms from 2010 to 2015, our results show that firms with more frequent CEO turnover have a lower firm performance. However, firms with more gender and education-level diversity could buffer the (...) disruptive effect of frequent CEO turnover on firm performance to offer a benefit to the organization. Our theory and findings suggest that effectively managing diverse workforce can be a resilience factor in an uncertain organizational environment because diverse workforce has complementary skills and behaviors that can cope better with uncertainty and signals social inclusion of an organization, thus fostering a long-term exchange relationship. These findings contribute to the literature on CEO turnover and diversity. (shrink)

Using data of China’s listed companies from 2000 to 2016, we employ a staggered difference-in-difference approach to identify the causal effects of CEO turnover on corporate innovation. First, we find that listed companies with CEO turnover experienced an average increase of 9.5% in the quantity of innovation and 8.9% in innovation quality after the change. The dynamic effect test supports the parallel trend condition, and the placebo test rules out the nonrandom selection issue. Second, the heterogeneity tests show (...) that CEO turnover plays a more prominent role in promoting innovation for listed firms with CEO duality, high financial constraints, and in high-tech industries. Third, CEO turnover affects corporate innovation by driving top management team reorganization and promoting R&D input. This paper has important implications for the understanding of the role of CEO turnover in companies’ innovation, as well as for strategy formulation and implementation. (shrink)

This paper examines the relationship between turnover among chief executive officers and corporate sustainability performance by identifying the influence of two major types of succession to the top job and the reasons for change. Our model also integrates the firm’s past prioritization of CSP and the impact of a company’s participation in the Global Reporting Initiative. Upper echelons theory and agency theory frameworks are adopted to understand CSP. Using an analysis of panel data for 88 public companies across 13 (...) years in France, we find that a change of chief executive has a positive and significant effect on CSP 5 years after the change. This positive effect is stronger when the new CEO is recruited from outside the firm. The impact on CSP is invariably positive and significant, except for voluntary departures. The arrival of a new CEO affects CSP less when the firm has already achieved a high standard of CSP and participates in the GRI. These results are obtained after controlling CSP determinants already validated in the literature. The findings show that expectations of CEOs are not solely economic and financial but also concern CSP. In terms of governance, they should prompt shareholders looking to strengthen CSP to choose new CEOs from outside the firm and to encourage the firm to participate in the GRI. (shrink)

Companies increasingly implement digital transformation strategies to promote efficiency. Nevertheless, there are few concerns about employees’ acceptance of the changes, especially the executives’ adaptability, which is an important part of digital transformation strategy implementation. By utilizing the “searching-matching” in keywords of the annual reports of public listed companies in China, we measured the degree of corporate digital transformation to analysis its influence on the turnover rate of the Chairman and CEO. We found that digital transformation decreases the possibility of (...) Chairman and CEO’s turnover. Derived from the dynamic managerial capital theory, we demonstrated that executives’ social network and political connections both have a moderate effect on the relationship between digital transformation and the turnover rate of executives. These findings will contribute to the digital transformation research by integrating with executives’ dynamic managerial capital which is attained through social networks and political connections. (shrink)

This study investigates the impact of fraud/lawsuit revelation on U.S. top executive turnover and compensation. It also examines potential explanatory variables affecting the executive turnover and compensation among U.S. fraud/lawsuit firms. Four important findings are documented. First, there was significantly higher executive turnover among U.S. firms with fraud/lawsuit revelation in the Wall Street Journal than matched firms without such revelation. Second, although on average, U.S. top executives received an increase in cash compensation after fraud/lawsuit revelation, this increase (...) is smaller than that of matched non-fraud/lawsuit firms. Third, fraud/lawsuit firms were more likely to change top executive when chief executive officer (CEO) was not the board chairman and CEO had been on the board for a short time. Fourth, fraud/lawsuit firms were more likely to reduce their executive cash compensation when profitability was low, firms were involved in fraud, the compensation committee size was small, and the board met more often. These findings indicate that although, in general, U.S. fraud/lawsuits firms did not reduce their executive cash compensation, those involved in fraud were more likely to reduce their executive cash compensation than to change their top executives. The finding, that ethical standards is not a significant factor for U.S. executive turnover nor compensation reduction, suggests that ethics appears to play no part in the board’s decisions, and that U.S. firms may have ethical standards in writing but they do not implement nor enforce the standards. (shrink)

This longitudinal case study reports on a charity in the UK which gained a new CEO who was reported by two middle managers who worked in the charity, to embody all or most of the ten characteristics within a measure of corporate psychopathy. The leadership of this CEO with a high corporate psychopathy score was reported to be so poor that the organisation was described as being one without leadership and as a lost organisation with no direction. This paper outlines (...) the resultant characteristics of the ensuing aimlessness and lack of drive of the organisation involved. Comparisons are made to a previous CEO in the same organisation, who was reportedly an authentic, effective and transformational leader. Outcomes under the CEO with a high corporate psychopathy score were related to bullying, staff withdrawal and turnover as effective employees stayed away from and/or left the organisation. Outcomes also included a marked organisational decline in terms of revenue, employee commitment, creativity and organisational innovativeness. The paper makes a contribution to both leadership and to corporate psychopathy research as it appears to be the first reported study of a CEO with a high corporate psychopathy score. (shrink)

Some argue that managers over-invest in corporate social responsibility (CSR) activities to build their personal reputations as good global citizens. Others claim that CEOs strategically choose CSR activities to reduce the probability of CEO turnover in a future period through indirect support from activists. Still others assert that firms use CSR activities to signal their product quality. We find that firms use governance mechanisms, along with CSR engagement, to reduce conflicts of interest between managers and non-investing stakeholders. Employing a (...) large and extensive sample of firms within Russell 2000, S& 500 and Domini 400 indices during the 1993-2004 period, we find that consistent with the conflict-resolution hypothesis, the CSR choice is positively associated with governance characteristics, including board independence, institutional ownership, and analyst following. In addition, after correcting for endogeneity of CSR engagement, our results show that CSR engagement positively influences operating performance and firm value, supporting the conflict-resolution hypothesis as opposed to the over-investment and strategic-choice arguments. We find only a weak support of the product-signaling hypothesis as a major motive of CSR engagement. (shrink)

This study contributes to the corporate social responsibility, stakeholder theory, and executive succession literature by examining the effect of corporate social irresponsibility on strategic leadership turnover. We theorize that firms’ CSiR increases the likelihood of executive turnover. We also investigate the nature of succession and successor origin following CSiR. We further examine how the CSiR–CEO succession relationship is moderated by firm visibility to stakeholders and industry dynamism. Our results, based on a dataset of 248 U.S. public firms between (...) 2001 and 2008, provide evidence that firms’ CSiR affects what is conventionally seen as primarily a market-driven decision on executive turnover, especially when firms operate in a more dynamic industry. Research contributions and implications are discussed. (shrink)

A product harm crisis undermines a firm’s reputation as well as its managers’ career outlook. To shake off the stigmatization resulting from the PHC and regain a firm’s legitimacy among stakeholders, managers usually face an ethical dilemma as they choose to be transparent about the crisis’ financial implications or to obfuscate them to neutralize the negative impact of the PHC. We find evidence that managers engage in income-increasing earnings management when their firms experience PHCs. Moreover, while income-increasing earnings management in (...) PHCs reduces the likelihood of customer loss and CEO forced turnover in the short run, such behavior can be deemed opportunistic and unethical as it carries long-run negative consequences in terms of a higher likelihood of accounting restatement and weaker future operating performance. Finally, managers in firms that are subject to stricter external monitoring and managers in firms with proactive ethical policies are less likely to engage in upward earnings management in PHCs. (shrink)

This study examines events at the conclusion of the 2006 stock option backdating scandal: the departures of C-level executives from firms implicated in backdating. The authors ask whether removing executives brings closure to the scandal, or if executive turnover creates greater uncertainty. Using a sample of 236 executive departures, the authors find that although overall market reaction to executive departures is negative, those departures involving a firm’s CEO or CFO ameliorate the market reaction. The authors also find that market (...) reaction worsens when the CEO “resigns,” versus being terminated, and when the firm involved has been previously identified as socially responsible. Results suggest that firms, by shaping who and how executives depart, may amplify or dampen the damage of existing scandalizing events. (shrink)

While there are growing bodies of research examining both the differences between strongly and poorly socially performing firms, and the impact of firm leaders on other strategic outcomes, little has been done in examining the effect of firm leaders on corporate social performance (CSP). This study directly addresses this issue by using upper echelon theory, and the KLD Research Analytics CSP ratings, to show that observable CEO characteristics predict differences in CSP between firms, even when firm and industry characteristics are (...) controlled for. Using a sample of 650 public US firms I find that strong or exemplary CSP, as measured by the strengths categories of KLD's ratings, is positively related to the CEO having a bachelor's degree in humanities, having a breadth of career experience and being female. I find that KLD strength ratings are negatively related to the CEO having a bachelor's degree in economics and to their level of short-term compensation. Preliminary tests of causality support the assertion that these effects reflect CEO discretion rather than being an artifact of reverse causality. Significant relationships between the CEO characteristics and poor social performance as measured by the concerns categories of KLD's ratings are not found. This suggests that CEOs have more discretion in influencing strong and exemplary social performance than in impacting poor CSP. Implications, particularly for economics education, are discussed. While there are many fruitful directions for future research, the benefits and challenges to conducting similar studies in other countries is focused upon to correspond to the global nature of this special issue. (shrink)

Protein turnover (PT) has been formally defined only in equilibrium conditions, which is ill‐suited to quantify PT during dynamic processes that occur during embryogenesis or (extra) cellular signaling. In this Hypothesis, we propose a definition of PT in an out‐of‐equilibrium regime that allows the quantification of PT in virtually any biological context. We propose a simple mathematical and conceptual framework applicable to a broad range of available data, such as RNA sequencing coupled with pulsed‐SILAC datasets. We apply our framework (...) to a published dataset and show that stimulation of mouse dendritic cells with LPS leads to a proteome‐wide change in PT. This is the first quantification of PT out‐of‐equilibrium, paving the way for the analysis of biological systems in other contexts. (shrink)

High turnover intention is a problem in the workforce today. The purpose of this study is to determine the relationship between experienced workplace incivility and psychological well-being on turnover intention. The subjects of this study were 46 millennial employees who had worked for at least three months. Data were collected with turnover intention scale, experienced workplace incivility scale, and psychological well-being scale. Partial Least Square PLS-SEM analysis was used to analyze the data. Findings indicate that experienced workplace (...) incivility is positively related to turnover intention, while psychological well-being is negatively related to employee turnover intention. The results show that workplace incivility affects employee turnover intention higher than psychological well-being for millennial employees. Connections and communality are characteristics of millennial employees; therefore, they consider that the environment is essential. It is essential for employers to develop a work condition that minimalizes experienced workplace incivility and improves the psychological well-being of their employees to reduce turnover intention among millennial employees. (shrink)

Publication date: 30 August 2017 Source: Author: Ghulam Abid, Tahira Hassan Butt Employees are the building blocks and valuable assets in an organization. Organizational researchers and practitioners have shown a burgeoning attention to satisfy and retain key performer as the cost of leaving a job is very high for the employing organizations. Discovering turnover intention in its formation stages is very crucial, not only to resist its’ piled up effect but also to control the actual turnover in the (...) future. Most of the times, management is not aware of the employee’s quit intention because employees don’t show their intention explicitly until they actually leave the organization. However, majority of the times employees share their feeling with their colleagues or other close work mates. Based on positive relationship at work, we argued that the individuals who work together normally share their feelings with their close colleagues regarding their decision of leaving or staying with the current employer. Therefore, the objective of the current study is to investigate the relationship between turnover intention and expressed turnover intention. Furthermore, we offer a new perspective to data collection from other sources, which will assist us in shortening the questionnaire, also minimizing the common method bias and knowing the quit intention from other source. Finally, theoretical and practical implications along with direction for future studies are also discussed. (shrink)

Abstract:In 2003, CEOs of the 365 largest U.S. corporations were paid on average $8 million, 301 times as much as factory workers. This paper asks whether CEOs get paid too much. Appealing to widely recognized moral values, I distinguish three views of justice in wages: the agreement view, the desert view, and the utility view. I argue that, no matter which view is correct, CEOs get paid too much. I conclude by offering two ways CEO pay might be reduced.

This paper aims to analyse how the discourse of CEO letters and other factors influence community involvement and Social Licence to Operate (SLO) in the mining industry. The analysis is based on qualitative information disclosed in sustainability reports and CEO letters from 32 mining firms. Content analysis was undertaken to obtain data for the study, and then a regression analysis and a multiple correspondence analysis were used to test the hypotheses defined in the study. The results indicate that the CEO (...) discourse influences how a firm expresses the importance of gaining its SLO, the philanthropic activities in which companies become involved and the destinations of the investments in the communities in which they operate. The results also show changes in the discourse between 2011 and 2015, which are, in part, explained by the difficult situation experienced by the sector during this period. The paper contributes to the Corporate Social Responsibility literature by integrating different theories from this field into the SLO framework. The analysis carried out and the results obtained are useful for both CEOs and Sustainability Managers, especially in managing their relationships with the communities where they operate or intend to operate. (shrink)

Do unobservable CEO characteristics predict corporate social performance and are they significantly correlated with CEO compensation? How meaningful is stock-based CEO compensation as a predictor of CSP? To answer these questions, the author empirically examines the relationship between stock-based CEO compensation and CSP while accounting for unobservable CEO characteristics. This study finds that CEO fixed effects account for a significant variance in CSP and that these fixed effects are correlated with CEO compensation variables in a statistically significant manner. The findings (...) suggest that unobservable CEO characteristics should be accounted for when examining the effect of CEO compensation variables on CSP. The findings also highlight the usefulness of stock-based compensation instruments for shareholders and other stakeholders who care about CSP and intend to promote CEO attention to social and ethical issues. (shrink)

In spite of an increasing number of studies on ethical climate, little is known about the antecedents of ethical climate and the moderators of the relationship between ethical climate and work outcomes. The present study conducted firm-level analyses regarding the relationship between chief executive officer (CEO) ethical leadership and ethical climate, and the moderating effect of climate strength (i.e., agreement in climate perceptions) on the relationship between ethical climate and collective organizational citizenship behavior (OCB). Self-report data were collected from 223 (...) CEOs and 6,021 employees in South Korea. The results supported all study hypotheses. As predicted, CEOs' self-rated ethical leadership was positively associated with employees' aggregated perceptions of the ethical climate of the firm. The relationship between ethical climate and firm-level collective OCB was moderated by climate strength. More specifically, the relationships between ethical climate and interpersonally directed collective OCB and between ethical climate and organizationally directed collective OCB were more pronounced when climate strength was high than when it was low. Theoretical and practical implications of these findings are addressed herein. (shrink)

This paper examines the relationship between CEO incentives and strong and weak corporate social performance. Using the KLD database we find that incentives have no significant relationship with strong social performance. Salary and long-term incentives have a positive association with weak social performance.

This study uncovers a new finding on the impact of CEO tenure on corporate social and environmental performance (CS&EP) in coastal and non-coastal areas of China using fixed-effect panel data regression models. The Two-Stage Least Squares instrumental panel regression is used to validate the veracity of the empirical results. To this end, we extract data from all non-financial Chinese listed firms for the period of 2009 to 2015. By applying the multivariant framework, the findings of the study exhibit a negative (...) and significant effect of CEO tenure on CS&EP. Moreover, this study shows that firms with head offices in coastal areas of China tend to weaken the negative impact of CEO tenure on CS&EP, indicating that CS&EP is more focused in coastal areas of China than non-coastal ones. The findings suggest that the increase in CEOs’ CS&EP in the early years of their service tenure tends to increase their compensation packages. This study is useful for policymakers to link CS&EP with firm economic practices to attain sustainable development objectives. (shrink)

This study investigates the influence of chief executive officers' (CEOs) career horizon on the adoption of Global Reporting Initiative (GRI) standards for corporate social responsibility (CSR) reporting. Using data from A-share Chinese listed firms on the Shanghai and Shenzhen stock exchanges from 2010 to 2020, we employ logistic regression analysis to examine the empirical relationship. Our findings indicate that companies led by CEOs with shorter career horizons (older CEOs) are less inclined to adopt GRI reporting standards for CSR reporting. This (...) association is particularly pronounced in non-state-owned enterprises compared to state-owned enterprises. Additionally, we observe a weaker relationship between CEO career horizon and GRI adoption when the CEO possesses foreign experience. These results remain robust across various measures of CEO career horizons and econometric methodologies as well. The implications of our findings are significant for understanding the development and implementation of GRI standards for CSR reporting, particularly within the context of China. (shrink)

The creative thinking and ability of top management team members is important in coping with rapid changes in the external environment and improving the competitive advantage of an organization. This research focuses on the CEO–TMT interface to explain how CEOs influence TMT characteristics, which in turn affects TMT outcomes. Based on social learning theory, this study examines the associations among CEO ethical leadership, TMT cohesion and TMT creativity in a Chinese context using a total of 91 top management teams. To (...) verify the reliability and validity of the constructs, a series of confirmatory factor analyses (CFAs) were run. The results showed that the hypothesized model captured distinct constructs and fits the data well. Multistep regression method was used to test hypotheses. The results indicated that (a) CEO ethical leadership has a positive effect on TMT creativity; (b) TMT cohesion plays a mediating role in the relationship between CEO ethical leadership and TMT creativity; and (c) power distance plays a moderating role in the relationship between CEO ethical leadership and TMT creativity. The greater the power distance, the weaker the positive relationship between CEO ethical leadership and TMT creativity. This study demonstrates the value of CEO ethical leadership and advocates the importance of establishing team cohesion and building a psychologically safe environment to motivate top managers within an organization to share information and knowledge to improve creativity. (shrink)

Must CEOs Be Saints? Contra Moriarty on CEO Abstemiousness by Robert KolbIn this journal, Jeffrey Moriarty argued that CEOs must refuse to accept compensation above the minimum compensation that will induce them to accept and per­form their jobs. Acting otherwise, he maintains, violates the CEO’s fiduciary duty, even for a CEO new to the firm. I argue that Moriarty’s conclusion rests on a failure to adequately distinguish when a person acts as a fiduciary from when she acts on her own (...) account as a person. Further, Moriarty’s argument assumes that the CEO knows this minimum level of compensation. However, we learn the suitability of compensation only through the market process of wage negotiation, not through some process of introspection. I conclude that a CEO who abstains from interfering with the board of directors and its compensation com­mittee is morally free to negotiate for the highest wage available. (shrink)

This paper examines the influence of CEO career horizon problems on corporate social responsibility. We assume that as CEOs are getting older, they tend to disengage in CSR due to their shorter career horizons. We further argue that high levels of industry-level discretion and blockholder ownership amplify the negative effects of CEO age on CSR. Using a panel sample of US-based firms over 2004–2009, we do not find the main effect of CEO age on CSR, but find support for the (...) moderating effects, such that CEO age is negatively associated with CSR when there are high levels of ILD and blockholder ownership. Therefore, results suggest that CEO career horizon problems matter for CSR when CEOs have sufficient discretion over the firm’s strategic decisions and outside blockholders put more pressure on CEOs to engage in financial earning management. (shrink)

Chief executive officers (CEOs) are typically paid great amounts of money in wages and bonuses by commercial companies. This is sometimes defended with an argument from peer comparison; roughly that “our” CEO has to be paid in accordance with what other CEOs at comparable companies get. At first glance this seems like a poor excuse for morally outrageous pay schemes and, consequently, the argument has been ignored in the previous philosophical literature. In contrast, however, this article provides a partial defence (...) of the argument from peer comparison. Moreover, it is demonstrated how a serious consideration of this argument sheds further light on both incentive- and desert-based theories of just pay. (shrink)

Since male CEOs dominate corporate leadership, the literature on top management decision making suffers from an implicit masculine bias. Although research indicates that males and females are biologically and psychologically different, the leadership characteristics of female CEOs are largely unexplored. Two of these characteristics, risk aversion and ethical sensitivity, are tied to key accounting issues, such as conservatism in financial reporting and steadfast opposition to fraud. In this study, we examine the relationship between CEO gender and accounting conservatism, and find (...) a positive association between the two. Consistent with conventional wisdom, this association appears to be stronger in firms with high rather than low litigation and takeover risks. This study contributes to the ethics literature by highlighting the benefits of gender diversity in upholding the integrity of financial reporting. (shrink)

This study examined the relationship between CEO ethical leadership and corporate social responsibility by focusing on the mediating role of organizational ethical culture and the moderating role of managerial discretion. Based on a sample of 242 domestic Chinese firms, we found that CEO ethical leadership positively influences corporate social responsibility via organizational ethical culture. In addition, moderated path analysis indicated that CEO founder status strengthens while firm size weakens the direct effect of CEO ethical leadership on organizational ethical culture and (...) its indirect effect on corporate social responsibility. Theoretical and managerial implications of these results are discussed. (shrink)

We examine whether and how CEO foreign experience affects firm’s green innovation. Using a sample of Chinese public companies and hand-collected CEO foreign experience data, we document a positive association between CEO foreign experience and corporate green innovation. Furthermore, consistent with the view that CEOs with foreign experience would play a more significant role when provided with more resources, we find that the positive relationship is more pronounced in less financially constrained firms, in state-owned enterprises, and in less competitive industries. (...) Additional analyses indicate that enhanced environmental ethics and general competency are two potential mechanisms through which CEO foreign experience affects corporate green innovation. Finally, we find that CEO foreign experience is positively related to green innovation quality and internationalization. Collectively, these findings suggest that CEO foreign experience is a significant factor for corporate green innovation in emerging markets. (shrink)

Research suggests that international assignment experience enhances awareness of societal stakeholders, influences personal values, and provides rare and valuable resources. Based on these arguments, we hypothesize that CEO international assignment experience will lead to increased corporate social performance (CSP) and will be moderated by the CEO's functional background. Using a sample of 393 CEOs of S&P 500 companies and three independent data sources, we find that CEO international assignment experience is positively related to CSP and is significantly moderated by the (...) CEO's functional background. Specifically, CEOs with international assignment experience and an output functional background (e.g., marketing and sales) are positively associated with greater CSP. (shrink)

There is ample discussion of MBA self-serving values in the corporate social responsibility literature, and yet empirical studies regarding the corporate manifestations and consequences of those values are scant. In a comprehensive study of major US public corporations, we find that MBA CEOs are more apt than their non-MBA counterparts to engage in short-term strategic expedients such as positive earnings management and suppression of R&D, which in turn are followed by compromised firm market valuations.

This study examines the impact of the Chief Executive Officer ’s interlocking, created through serving on other companies’ audit committees and/or boards, on corporate social responsibility performance of the focal company and that of its linked companies. We find that CEO interlocking positively affects CSR performance of both the focal company and its linked companies. Further analysis shows that interlocks created by the CEO enhance CSR performance and in turn the financial performance of both the focal company and its linked (...) companies. Our findings are robust to a battery of analyses, including Heckman’s selection bias correction, propensity score matching, alternative measures of CSR performance, and CEO interlocks. These findings are important to regulators, company management teams, and other stakeholders with an interest in how the social ties of CEOs influence companies’ CSR performance and in the CSR–financial performance nexus. (shrink)

Separate focus on crop fertilization or feeding practices inadequately describes nitrogen (N) loss from mixed dairy farms because of (1) interaction between animal and crop production and between the production system and the manager, and (2) uncertainties of herd N production and crop N utilization. Therefore a systems approach was used to study N turnover and N efficiency on 16 conventional and 14 organic private Danish farms with mixed animal (dairy) and crop production. There were significant differences in N (...) surplus at the farm level (242 kg. N/ha. vs. 124 kg. N/ha. on conventional and organic dairy farms respectively) with a correlation between stocking rate and N surplus. N efficiency was calculated as the output of N in animal products divided by the net N import in fodder, manure and fertilizer. N turnover in herd and individual crops calculated on selected farms showed differences in organic and conventional crop N utilization. This is explained via a discussion of the rationality behind the current way of planning the optimum fertilizer application in conventional agriculture. The concept of marginal N efficiency is insufficient for correcting problems of N loss from dairy farms. Substantial reductions in N loss from conventional mixed dairy farms is probably unlikely without lower production intensity. The concept of mean farm unit N efficiency might be a way to describe the relation between production and N loss to facilitate regulation. This concept is linked to differing goals of agricultural development—i.e. intensification and separation vs. extensification and integration. It is discussed how studies in private farms—using organic farms as selected critical cases—can demonstrate possibilities for balancing production and environmental concern. (shrink)

This study examines whether the chief executive officer’s poverty experience has an impact on firms’ corporate social responsibility. We find that firms’ CSR performance increases with CEOs’ poverty experience; specifically, firms with CEOs who experienced early-life poverty are associated with more socially responsible activities and fewer socially irresponsible activities, such as on-the-job consumption, and are more associated with key stakeholder-related rather than community-related CSR. We further find that the positive relationship between the CEO’s poverty experience and CSR strengthens for well-educated (...) or powerful CEOs. Our evidence is consistent with our conjecture that CEOs who experienced early-life poverty have stronger compassion and prosocial psychology. Consequently, these CEOs are more willing to make long-term investments in socially beneficial activities, leading to better CSR performance, which further confirms the altruistic motivation of CSR. (shrink)

Theoretical studies suggest that, when determining the workplace safety level, CEOs face a trade-off between ex ante safety-improving expenditures and the expected losses due to ex post injury and illness occurrences. We examine whether firms with higher CEO inside debt holdings have safer workplaces. Using establishment-level employee workplace injury and illness data, we find that CEOs’ inside debt holdings are negatively associated with employee workplace injury and illness cases. This relationship is more pronounced if workers’ compensation premiums are more sensitive (...) to injury claims and for firms with more government business and less pronounced for firms with higher levels of secured debt. We provide some evidence that our main result stems from CEOs increasing safety investments. Our empirical results are shown to be robust under a batch of robustness tests and when considering potential endogeneity problems. Our findings suggest that CEOs with higher levels of inside debt holdings are more sensitive to wealth loss due to employee injury and illness, leading to a safer workplace. (shrink)

The controversial issue of whether Chief Executive Officer (CEO) compensation is excessive or appropriate is examined in terms of two competing claims: that CEOs are overpaid for the value they provide to an enterprise, and that CEO compensation is inherently equitable. Various arguments and perspectives on both sides of the issue are assessed. Little evidence supports the claim that CEO performance justifies very high compensation. Further, the complex interactive alliance between boards of directors and CEOs compromises rational decision-making about CEO (...) compensation, with the Enron affair offered as an illustration of what can go wrong when dishonest CEO actions combine with lax board oversight. Recommendations for restoring trust in the system include continuing current regulatory actions, using different metrics for determining CEO compensation, making board member-CEO relationships transparent to all company stakeholders, and several more radical ideas for change. Stakeholders must resist being distracted by other social, economic, or political issues from pursuing serious, lasting reform. (shrink)

This study investigates the effect of each component of CEO compensation, including cash-based component (salary and bonus), equity-based component (stock grant and stock option), and other perks on disclosure of corporate social responsibility (CSR) information of global firms. The study uses 2SLS IV estimation method and a sample of 580 US-based firms in a seven-year period. The study finds that equity-based remuneration has a significant and positive impact on a firm's CSR disclosure while CEO salary, bonus, and other perquisites have (...) significant detrimental effects on CSR disclosure. The paper indicates that a CEO's motivation for CSR reporting might arise from stock grant and option; meanwhile, salary, bonus and other perks could demotivate the CEO in this regard. Our findings offer insight into designing CEO compensation packages to meet shareholders' interests and stakeholders' expectations for a sustainable business. (shrink)

For over four decades, the topic of Chief Executive Officer (CEO) compensation has attracted considerable attention from the fields of economics, finance, management, public policy, law, and business ethics. As scholarly interest in CEO pay has increased, so has public concern about the ethics of high CEO pay. Despite growing interest and pressure among the public and government to reduce CEO pay, it has continued to increase. Using a multi-method design incorporating a pilot study, two online experiments, and an event (...) study, we investigate the impact of CEO pay on consumer purchase intent and find that this negative relationship is magnified under conditions of brand crisis. We also find that the negative interaction of high CEO pay and brand crisis on purchase intent is more negative when the brand has strong equity. Finally, when the CEO is awarded high pay while the firm they manage is undergoing a brand crisis, consumers lose trust in the firm’s brand which reduces consumer purchase intent. This research provides insight on how governance decisions can impact consumer perceptions of corporate brands and consumer behavior, with implications for public policy leaders, boards of directors, CEOs, and Chief Marketing Officers regarding how to manage and message CEO pay. (shrink)

In recent years, misconduct by CEOs has led to firings, scandals, and financial losses for companies. Our study explores personality antecedents of CEO misconduct using Five-Factor Model personality traits and personality disorder profile similarity indices. The sample of 259 CEOs used in the analysis includes CEOs who were involved in well-publicized misconduct scandals as well as CEOs who had no misconduct scandals. Teams of trained raters measured CEO personality using psychometric personality rating scales and video-based assessment methods. Logistic regression results (...) provided some support for hypotheses regarding relationships between ethical misconduct, fraud, excessive risk taking, and sexual misconduct and personality traits including “Big Five” traits and personality disorder profile similarity indices. (shrink)

This study examines the impact of chief executive officer ability on firms’ corporate social responsibility 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. (shrink)

The question of whether females tend to act more ethically or risk-averse compared to males is an interesting ethical puzzle. Using a large sample of US firms over the 1992–2014 period, we investigate the effect that the gender of a chief executive officer has on earnings management using classification shifting. We find that the pre-Sarbanes–Oxley Act period was characterized by high levels of classification shifting by both female and male CEOs, but the magnitude of such practices is, surprisingly, significantly higher (...) in firms with female CEOs than in those with male CEOs. By contrast, our results suggest that following the passage of the punitive SOX Act, classification shifting by female CEOs declined significantly, whilst it remained pervasive in firms with male CEOs. This suggests that the observable differences in financial reporting behavior between male and female CEOs seem to be because female CEOs are more risk-averse, but not necessarily more ethically sensitive than their male counterparts are. The central tenets of our findings remain unchanged after several additional checks, including controlling for alternative earnings management techniques, corporate governance mechanisms, CEO and chief financial officer characteristics and propensity score-matching. (shrink)

In the context of the slowing growth of the real economy and the rapid development of the financial industry, more and more non-financial companies are participating in the financial industry for the purpose of development and profit expansion. China has gradually appeared the phenomenon of corporate financialization. This paper uses the panel fixed effect model empirically examines the effect of political turnover on corporate financialization by using data of listed companies and top prefecture level officials in China between 2007 (...) and 2020. We find that the turnover of mayors significantly decreases corporate financialization, while the turnover of party secretaries has no impact on corporate financialization. Moreover, these results are moderated by the characteristics of government officials and firm’s characteristics. Our results further show that changes by mayors increase fixed asset investment and decrease cash holdings, and, thus, reduce corporate financialization. These findings could assist in solving the “from real to virtual” problems, strengthening financial services, and realizing high-quality economic development. (shrink)

Background:Healthcare organizations are now challenged to retain nurses’ generation and understand why they are leaving their nursing career prematurely. Acquiring knowledge about the effect of ethical work climate and level of perceived organizational support can help organizational leaders to deal effectively with dysfunctional behaviors and make a difference in enhancing nurses’ dedication, commitment, satisfaction, and loyalty to their organization.Purpose:This study aims to determine the relationship between ethical work climate, and perceived organizational support and nurses’ organizational commitment, job satisfaction, and (...) class='Hi'>turnover intention.Methods:A descriptive correlational research design was conducted in all inpatient care units at three major hospitals affiliated to different health sectors at Alexandria governorate. All nurses working in these previous hospitals were included in the study (N = 500). Ethical Climate Questionnaire, Survey of Perceived Organizational Support, Organizational Commitment Questionnaire, Index of Job Satisfaction, and Intention to Turnover scale were used to measure study variables.Ethical considerations:Approval was obtained from Ethics Committee at Faculty of Nursing, Alexandria University. Privacy and confidentiality of data were maintained and assured by obtaining subjects’ informed consent to participate in the research before data collection.Findings:The result revealed positive significant correlations between nurses’ perception of overall ethical work climate and each of perceived organizational support, commitment, as well as their job satisfaction. However, negative significant correlations were found between nurses’ turnover intention and each of these variables. Also, approximately 33% of the explained variance of turnover intention is accounted by ethical work climate, organizational support, organizational commitment, and job satisfaction, and these variables independently contributed significantly in the prediction of turnover intention.Recommendation:Strategies to foster and enhance ethical and supportive work climates as well as job-related benefits are considered significant factors in increasing nurses’ commitment and satisfaction and decreasing their turnover intention. (shrink)

Companies are expected to monitor sustainable behaviour to help improve performance, enhance reputation and increase chances of survival. This paper examines the relationship between sustainability committees and independent external assurance on the inclusion of sustainability-related targets in CEO compensation contracts. Using a sample of UK FTSE350 companies for 2011–2015 and controlling for governance and firm characteristics, we find both board-level sustainability committees and sustainability reporting assurance have a positive and significant association with the inclusion of sustainability terms in compensation contracts. (...) However, there is no joint impact between the voluntary use of independent external assurance and the role of sustainability committees on CEO compensation contracts. Sustainability-related terms in compensation contracts are more likely to be included, and higher compensation is likely to be paid, when assurance is provided by a Big4 firm and when a company operates in a sustainability-sensitive industry. Our findings highlight the potential of assured sustainability reports in assessing CEO performance in sustainability-related tasks, especially when sustainability metrics are included in CEO compensation contracts. Overall, our results suggest companies that invest in voluntary assurance are more likely to monitor management’s behaviour and be concerned about the achievement of sustainability goals. (shrink)

This study seeks to shed light on the effect of star CEOs on the environmental, social, and governance (ESG) performance of Chinese firms. Relying on the theoretical perspective of role identity and role constraints, we analyze data from 1222 Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges from 2006 to 2019. The results analyzed using the ordinary least squares estimate method reveal a positive effect of star CEOs' extreme confidence and legitimacy pressure mechanisms on ESG performance. We also (...) find that this positive relationship is negatively moderated by higher organizational slack but strengthened by a lower level of regional marketization, as the degree of firms' dependence on external stakeholders' resources differs significantly. Additionally, this study finds that ESG activities are less likely to be associated with firm performance if star CEOs pursue them to satisfy their need for star status. These findings supplement the early tests of the influence mechanism of star CEOs on organization-level results and expand the context discussion of role identity and role constraints theory in the Chinese institutional environment. (shrink)

This paper aims to analyse how the discourse of CEO letters and other factors influence community involvement and Social Licence to Operate (SLO) in the mining industry. The analysis is based on qualitative information disclosed in sustainability reports and CEO letters from 32 mining firms. Content analysis was undertaken to obtain data for the study, and then a regression analysis and a multiple correspondence analysis were used to test the hypotheses defined in the study. The results indicate that the CEO (...) discourse influences how a firm expresses the importance of gaining its SLO, the philanthropic activities in which companies become involved and the destinations of the investments in the communities in which they operate. The results also show changes in the discourse between 2011 and 2015, which are, in part, explained by the difficult situation experienced by the sector during this period. The paper contributes to the Corporate Social Responsibility literature by integrating different theories from this field into the SLO framework. The analysis carried out and the results obtained are useful for both CEOs and Sustainability Managers, especially in managing their relationships with the communities where they operate or intend to operate. (shrink)

This study focuses on CEO hubris and its effect on corporate unethical behaviour—pollution in particular, and in addition examines critical institutional contingencies [state ownership, political connection and industrial competition] which may moderate this effect. With data from over-polluting listed firms based on the real-time pollution monitoring system in transitional China from 2015 to 2017, we find that CEO hubris is significantly positively related to firm pollution, and that the moderating role of SO is not significant, that PC positively moderates the (...) hubris–pollution relationship and that industrial competition negatively moderates this relationship. These findings contribute to research on the upper echelon theory, institutional theory and the growing literature on emerging economies. (shrink)

We explore the relationship between chief executive officer (CEO) personality traits and corporate social responsibility (CSR) reporting. Upper echelons theory indicates that the values, experiences, and personalities of top organizational managers influence their organization's strategic decisions and effectiveness. We utilize IBM Watson Personality Insights software to infer CEOs’ personality traits based on their responses to questions raised by analysts during year‐end conference calls; we obtain CEOs’ Big Five personality traits—openness, conscientiousness, extraversion, agreeableness, and neuroticism—from which we compute a measure of (...) their risk tolerance. Using a longitudinal dataset of Standard and Poor's 500 firms for 2008–2015, we document that high CEO risk tolerance is related to lower CSR report readability and smaller CSR disclosure volume. This finding indicates that executives who are comfortable with greater risk are more willing to supply stakeholders with reports that are shorter and require greater effort to understand. Exploration of the association between CEO Big Five personality traits and CSR report readability and disclosure volume allows key stakeholders to better comprehend CSR disclosures and connotations thereof. Overall, our results contribute to the debate on how CEO personality traits affect organizations’ CSR disclosure reporting strategies, and support upper echelons theory in the CSR setting. (shrink)

In this study, we explore the role of Chief Executive Officers’ incentives, split between monetary and non-monetary, in relation to corporate social responsibility. We base our analysis on a sample of 597 US firms over the period 2005–2009. We find that both monetary and non-monetary incentives have an effect on CSR decisions. Specifically, monetary incentives designed to align the CEO’s and shareholders’ interests have a negative effect on CSR and non-monetary incentives have a positive effect on CSR. The study has (...) important implications for the design of executive remuneration plans, as we show that there are many levers that can affect the CEO’s decisions with regard to CSR. Our evidence also confirms the prominent role of the CEO in relation to CSR decisions, while also recognizing the complexity of factors affecting CSR. Finally, we propose a research design that takes into account endogeneity issues arising when examining compensation variables. (shrink)

This study focuses on CEO hubris and its detrimental effect on corporate financial performance along with an examination of critical corporate governance contingencies that may moderate the negative effect. From 654 observations of 164 Korean firms over the years 2001–2008, we found that CEO power exacerbated the negative effect of CEO hubris on corporate financial performance, whereas board vigilance mitigated it. This study provides empirical evidence that entrenchment problems arising from CEO hubris would be exacerbated as CEOs become more powerful, (...) but weakened as board of directors become more vigilant. Theoretical contributions and practical implications will be discussed. (shrink)