Financial expert CEOs and corporate social responsibility decoupling Online publication date: Fri, 05-Jul-2024
by Sana Akbar Khan; René P. Orij; Nhung Vu
International Journal of Business Governance and Ethics (IJBGE), Vol. 18, No. 4/5, 2024
Abstract: We study CEOs with a financial background in relation to firms' corporate social responsibility (CSR) decoupling, referred to the gap between the actual and reported CSR performance. Using a sample of 2,513 firms operating in 29 countries from 2006 to 2017, we examine whether financial expert CEOs facilitate firms to tackle the institutional pressure and mitigate CSR decoupling. The result shows that financial expert CEOs reduce the CSR gap. We provide evidence suggesting that financial expert CEOs only affect the environmental dimension since this dimension is at the most concern of stakeholders. Moreover, board independence strengthens the relationship between financial expert CEOs and CSR decoupling, especially in the environmental dimension. Overall, the results suggest that CEOs with financial background matter to improve the CSR reporting quality and reduce the information asymmetry between firms and their stakeholders, contributing to the upper echelons theory.
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