Corporate social responsibility and chief executive officer wrongdoing: A fraud triangle perspective

Although corporate social responsibility (CSR) activities may facilitate firms to meet stakeholders' demands and gain legitimacy, there is little understanding of whether and how they may bring in harmful consequences such as chief executive officer (CEO) wrongdoing. We developed a framework to...

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Published inCorporate social-responsibility and environmental management Vol. 30; no. 2; pp. 874 - 888
Main Authors Zhu, Chunling, Zeng, Ruixin, Wang, Ruxi, Xiao, Yihui
Format Journal Article
LanguageEnglish
Published Chichester, UK John Wiley & Sons, Inc 01.03.2023
Wiley Periodicals Inc
Subjects
agency problem
CEO wrongdoing
CSR participation
Fraud
fraud triangle
Social responsibility
China
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Summary:Although corporate social responsibility (CSR) activities may facilitate firms to meet stakeholders' demands and gain legitimacy, there is little understanding of whether and how they may bring in harmful consequences such as chief executive officer (CEO) wrongdoing. We developed a framework to explore how CSR activities lead to CEO wrongdoing based on the fraud triangle of pressure, opportunity, and rationalization. Using a sample of 530 listed firms in China that issued CSR reports between 2011 and 2018, we found a positive relationship between CSR participation and CEO wrongdoing. We also found that this positive relationship is strengthened by firms' internal capability to gain profit and their risk orientation. Our study contributes to the CSR literature by examining the potential dark side of CSR activities, and by bridging stakeholder theory and CEO wrongdoing literature.
Bibliography:Funding information
National Natural Science Foundation of China, Grant/Award Number: 72202226
ISSN:1535-3958
1535-3966
DOI:10.1002/csr.2394