CEO Skin in the Game: Hindrance or Catalyst for CSR?
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2024-07-09
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en
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This study explores the relationship between Corporate Social Responsibility (CSR) performance and the financial dependence of Chief Executive Officers (CEOs), with a particular focus on the role of financial constraints, using a moderator-mediation framework. CEOs are under increased scrutiny for their business decisions nowadays. This study uses random effects cluster-robust standard errors with a unique panel dataset of 626 individual year observations from the S&P 500 during the years 2018-2022. The findings reveal a complex interaction where financial constraints generally improve CSR performance and financial constraints reduce CSR performance. Although there is insufficient evidence that financial constraints moderate or mediate the relationship between CEO financial dependence and CSR performance as this study lacks explanatory power and statistical significance, the results reveal that CEOs strategically alter their CSR efforts to the environmental dimension under financial distress. The study underscores the importance of CEO characteristics, such as financial dependence, gender and education, in shaping CSR outcomes and stresses the need for further development to refine the models and measures used in this academic landscape. These insights are valuable for academics, investors, policymakers, and CEOs aiming to understand the balance between financial stability and social responsibility.
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Faculteit der Managementwetenschappen