The Impact of CEO Duality and Financial Performance on CSR Disclosure: Empirical Evidence from State-Owned Enterprises in China

Abstract

: This paper studies the effects of a firm’s financial performance (FP) and chief executive officer’s (CEO) duality on the quality of corporate social responsibility (CSR) disclosure in the context of state-owned enterprises (SOEs) among Chinese A-share-registered companies. The results depict a negative relationship between CEO duality and CSR disclosure. Our results demonstrate that better-performing firms disclose CSR information more frequently and of higher quality compared with firms with poor financial performance. This role of financial performance in the quality of CSR disclosure is generally valuable in public enterprises; however, it is relatively sluggish in state-owned enterprises The outcomes indicate that the dual leadership structure reduces assessments and renders CEOs less liable to their stakeholders. Therefore, this study offers valuable information and details for regulators to improve corporate governance and CSR from the perspective of stakeholder theory.

Do financial performance and firm’s value affect the quality of corporate social responsibility disclosure: Moderating role of chief executive officer’s power in China

“…The direct influence of FP results on CSR disclosure is shown in Model 1, and the coefficient of ROA is significant (t = 0.013, p < 0.001). The outcome withholds (H1) fostering that aggregate FP is favorably correlated to the CSR disclosure, and our analysis is in line with prior research results (Choi et al, 2010;Li et al, 2013;Sial et al, 2018b;Voinea et al, 2022).…”

“…To inspect the main impact of financial efficiency and FV effects on CSRD, we estimated Eqs. (1, 2), in line with previous research (Li Y. et al, 2018;Javeed and Lefen, 2019;Zhou, 2019;Usman, 2020;Rauf et al, 2021a;Voinea et al, 2022), to study the effect of FP and value of the firm on the CSRD of the Chinese stock exchange-listed manufacturing firms. We estimated Eqs.…”

“…For more than three decades, several theoretical and empirical studies have been carried out to address the potential connection between CSR disclosure and FP ( Marom, 2006 ; Sial et al, 2018a ; Voinea et al, 2022 ). Among all those, studies by Anser et al (2018) and Yang et al (2019) are widely regarded as pioneering work in this area, focusing on the relationship between corporate social responsibility and FP ( Anser et al, 2018 ; Yang et al, 2019 ; Awaysheh et al, 2020 ).…”

“…This hence boosts poor investors’ evaluation ( Godfrey, 2005 ). The stakeholder theory of social control rights that CSR has a confident relationship with FP ( Voinea et al, 2022 ). The agency theory postulates that a high-powered chief executive officer will generate a fight between management and owners who are fundamental to the issue of the agency on the contradictory thinking, and corporate and managerial thinking indicates that strongly managed CEOs have extra benefits and are less costly ( Sah and Stiglitz, 1986 ).…”

Board Gender Diversity, Corporate Social Responsibility Disclosure, and Firm’s Green Innovation Performance: Evidence From China

“…(3) board independence (BINDP) is the number of independent directors on the board (Khalid et al, 2022); (4) chief executive officer duality (CEOD) is based on the scenario; if the CEO is also a company's board chair, it may help establish reliable and indisputable governance, encouraging the CEO's concentration of power (Fan et al, 2007); as a result, CEO duality may have an impact on GIP and CSRD. A dummy variable for CEO duality is utilized, with 1 representing the CEO as a board chair and 0 as otherwise; (5) firm size (FS) is taken as an indicator of financial performance and credibility and measured using the net income (asset) and employee number (Gavana et al, 2017); (6) the bookto-mark ratio (BMR) concerns the ratio of book value over the market value of the shareholder's capital (Voinea et al, 2022); (7) capital intensity (CAP) is the ratio of total assets to the operating revenue (Lee, 2010); (8) mandatory CSRD (MAND) represents the presence of mandatory regulation regarding CSRD (Chen et al, 2018); (9) return on assets (ROA), ratio of net income to average total assets (Long, 2018), and finally (10) exports of a company (EXPORTS) is a dummy variable representing whether a firm has exports in a particular year (Galbreath, 2019); and (11) a year dummy and an industry dummy were incorporated (Kim et al, 2019). All of these terms are frequently used in studies of Chinese companies.…”