CEO tenure and corporate social responsibility performance

In this study, we examine whether and how CEO tenure affects firms' corporate social responsibility (CSR) performance. Using a sample of U.S. firms for the 1999–2013 period, we find that firms' CSR performance is significantly higher in CEOs' early tenure than in their later tenure. W...

Full description

Saved in:
Bibliographic Details
Published inJournal of business research Vol. 95; pp. 292 - 302
Main Authors Chen, Wanyu (Tina), Zhou, Gaoguang (Stephen), Zhu, Xindong (Kevin)
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.02.2019
Subjects
Career concerns
Career horizon
CEO tenure
Corporate social responsibility
M14
Corporate social responsibility
Career horizon
Career concerns
G34
M52
CEO tenure
Online AccessGet full text

Cover

More Information
Summary:In this study, we examine whether and how CEO tenure affects firms' corporate social responsibility (CSR) performance. Using a sample of U.S. firms for the 1999–2013 period, we find that firms' CSR performance is significantly higher in CEOs' early tenure than in their later tenure. We also find that the relationship between CEO tenure and CSR performance is stronger when the board is more independent and CEOs have a longer expected employment period, supporting both the signaling interpretation of the career concern hypothesis and the career horizon hypothesis. Consistent with the trend of increasing awareness of the importance of CSR, we find that the relationship between CEO tenure and CSR performance has become more significant in recent years. Finally, we show that better CSR performance in a CEO's early tenure is associated with a lower CEO turnover probability, suggesting that commitment to CSR during CEOs' early tenure could enable them to mitigate career concerns. •Firms’ CSR performance is significantly higher in CEOs’ early tenure than in their later tenure.•The relationship between CEO tenure and CSR performance is stronger when the board is more independent.•The relationship between CEO tenure and CSR performance is stronger when CEOs have a longer expected employment period.•The relationship between CEO tenure and CSR performance has become more significant in recent years.•Better CSR performance in a CEO’s early tenure is associated with a lower CEO turnover probability.
ISSN:0148-2963
1873-7978
DOI:10.1016/j.jbusres.2018.08.018