Good for managers, bad for society? Causal evidence on the association between risk‐taking incentives and corporate social responsibility

Mayberry, Michael

doi:10.1111/jbfa.12451

Cited by 38 publications

(23 citation statements)

References 122 publications

(155 reference statements)

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“…Alternatively, risk-tolerant CEOs may be better able to ignore litigation risks that result from incomplete or unclear CSR disclosures compared with their less risk-tolerant counterparts. In fact, Mayberry (2020) found that CEOs' risk-taking incentives are negatively associated with CSR. Given that information is costly and public disclosures may reveal inside information to competitors, CEOs with high risk tolerance are more likely to disregard the risk that stakeholders may be unable to fully utilize the CSR information supplied.…”

Section: Hypothesis Development: Relationship Between Ceos' Personality and Csr Reportingmentioning

confidence: 99%

“…Capital-providing stakeholders may require managers to invest in riskier projects with higher growth potential and higher financial returns, whereas other stakeholders may want managers to reduce risk by investing in CSR (Chakraborty et al, 2019). CSR investment is perceived to be risk reducing as it helps firms build reputational and moral capital (Mayberry, 2020) and therefore negatively correlates with CEOs' risk-tolerant personality or risk-taking incentives.…”

Section: Hypothesis Development: Relationship Between Ceos' Personality and Csr Reportingmentioning

confidence: 99%

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CEO personality and language use in CSR reporting

Mahmoudian

Nazari

Gordon

et al. 2021

Business Ethics Env & Resp

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Chief executive officers (CEOs) hold the highest managerial authority in their enterprises. CEOs are responsible for overall organizational performance, which is influenced by their decisions. Recent business research has explored wide-ranging aspects of CEOs and their influence. Especially relevant to this study is research examining topics related to CEOs and corporate social responsibility such as the effects of CEO power and environmental, social, and governance disclosures on firm value (Li et al., 2018); the influence of CEO discourse on mining companies' social license to operate (de- Miguel-Molina et al., 2019); and the effects of CEO ethical idealism and ability on CSR disclosures (Everaert et al., 2019;García-Sánchez et al., 2020).Stakeholders' perceptions of organizational legitimacy (Dowling & Pfeffer, 1975) relate to organizational survival. In the modern environment, CSR reporting represents the key areas of both legitimacy and potential CEO influence. In particular, CEO personality may affect stakeholders' access to CSR information by altering the extent to which CSR reports are readable. Extant studies have ex-

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Section: Hypothesis Development: Relationship Between Ceos' Personality and Csr Reportingmentioning

confidence: 99%

Section: Hypothesis Development: Relationship Between Ceos' Personality and Csr Reportingmentioning

confidence: 99%

CEO personality and language use in CSR reporting

Mahmoudian

Nazari

Gordon

et al. 2021

Business Ethics Env & Resp

View full text Add to dashboard Cite

show abstract

“…However, its effect on CSR engagement is relatively less clear. Recently, few studies have focused on the CEO's delta (or vega) as a potential determinant of a firm's CSR engagement (Mayberry, 2020; McGuire et al, 2019) or the relationship between CEO's incentive and CSR (Ben‐Amar et al, 2021; Flammer et al, 2019; Peng, 2020). Nevertheless, to the best of our knowledge, our study is the first attempt to separately examine the effect of CEO's wealth alignment with shareholders (proxied by the CEO's delta) on the strength and concern CSR activities for external and internal stakeholders.…”

Section: Introductionmentioning

confidence: 99%

“…In other words, CEOs with a large vega have no incentive to invest in CSR activities; thus, we expect a negative effect (or no effect) of Vega on CSR engagement (i.e., β 2 < 0 or β 2 ¼ 0). Recently,Mayberry (2020) finds supportive evidence for the negative effect of Vega on CSR engagement. However, even according to this line of thought, Vega can induce CSR engagement (i.e., β 2 > 0) as CSR's insurance-like benefits can allow CEOs with a large vega to take high-risk projects more aggressively.…”

mentioning

confidence: 98%

Corporate social responsibility and the alignment of CEO and shareholders wealth: Does a strong alignment induce or restrain CSR?

Kim

Mun

Han

2022

Corp Soc Responsibility Env

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We examine whether a strong alignment of the chief executive officer (CEO) and shareholders wealth induces or restrains the firm's corporate social responsibility (CSR) engagement. CSR can enhance shareholders wealth consistent with stakeholder theory. However, CEOs maximizing their own utilities have an incentive to overinvest corporate resources for CSR engagement at shareholders' expense. Therefore, the strong alignment of the CEO and shareholders wealth is expected to lead the CEO to engage less in some CSR activities, particularly those are questionable to enhance shareholders wealth or those are only good for the CEO's private benefit.Empirically, we find that firms with strongly aligned CEOs are less likely to strengthen CSR activities for external stakeholders such as the environment, community, and human rights. This suggests that strengthening CSR for external stakeholders appears to be the consequence of agency problem rather than stakeholder theory. Overall, we argue that CEO-shareholders wealth alignment has a non-monotonic impact on CSR activities, and it can effectively mitigate the agency problem by restraining overinvestment in some CSR activities that may harm shareholders wealth.

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“…It is highly argued that CSR activities decrease stock price crash risk and firm default risk [180,[204][205][206][207]. In fact they are based on controlling and avoiding risk-taking mechanisms [125,208] and designed to avoid harming stakeholders through pollution prevention practices and fair-trade policies [179,209].…”

Section: Risk Mitigationmentioning

confidence: 99%

CSR: What Does Board Diversity Bring to the Table?

Yousfi¹,

Béji²

2022

Corporate Social Responsibility

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This chapter provides a theoretical and conceptual overview of the governance of corporate social responsibility (CSR). It is based on an extensive review of corporate governance literature, specifically on the composition of boards and committees and how they influence corporate outcomes. The attributes of committees’ members could play a key role in the definition of a CSR strategy and its implementation. The second section analyzes how diversity in boardrooms and CSR committees could foster CSR performance, through specific dimensions of social performance. It focuses on the influence of structural and demographic diversities in boardrooms on CSR performance and the role of CSR committees on the implementation of a strategic CSR-building process. The third section identifies CSR strategies: (1) strategic CSR driven by initiatives and pioneering actions and (2) responsive CSR based on the imitation of the main competitors and the implementation of basic actions to “avoid” stakeholders’ pressure. We point out that strategic CSR has been widely discussed and extended while responsive CSR is marginalized and often associated with low social performance. This dichotomous approach of CSR strategies could be biased. Many firms could display a strategic CSR in some areas and a responsive CSR in other areas. The role of CSR committees and their composition are discussed in section (4). The last section concludes the paper.

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Good for managers, bad for society? Causal evidence on the association between risk‐taking incentives and corporate social responsibility

Cited by 38 publications

References 122 publications

CEO personality and language use in CSR reporting

CEO personality and language use in CSR reporting

Corporate social responsibility and the alignment of CEO and shareholders wealth: Does a strong alignment induce or restrain CSR?

CSR: What Does Board Diversity Bring to the Table?

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