Title: Financial expert CEOs and corporate social responsibility decoupling

Authors: Sana Akbar Khan; René P. Orij; Nhung Vu

Addresses: ESDES Business School of UCLy, Lyon Catholic University, 10 Place des Archives, 69002, Lyon, France ' Center for Corporate Reporting, Finance and Tax, Nyenrode Business Universiteit, Straatweg 25, 3621 BG Breukelen, The Netherlands ' Loughborough University, Epinal Way, Loughborough LE11 3TU, UK

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.

Keywords: financial expert CEOs; CSR decoupling; upper echelons theory; corporate governance.

DOI: 10.1504/IJBGE.2024.139635

International Journal of Business Governance and Ethics, 2024 Vol.18 No.4/5, pp.430 - 455

Received: 03 Sep 2022
Accepted: 01 Dec 2022
Published online: 05 Jul 2024 *

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