Do CEO incentives and characteristics influence corporate social responsibility (CSR) and vice versa? A literature review

Abstract

Purpose This paper aims to analyze whether chief executive officer (CEO) incentives and characteristics (e.g. CEO power, CEO tenure) are linked with corporate social responsibility (CSR) and vice versa. Design/methodology/approach Based on upper echelons theory, the author conducts a structured literature review and evaluates 84 empirical-quantitative studies on CEO and CSR variables. Findings While the majority of the included studies analyzed the CEO-CSR link, there are indicators for a bidirectional relationship. Moreover, prior research has focused on CEO incentives, especially compensation contracts, and on the US capital market. A major research gap relates to CEO characteristics, e.g. CEO values, education and experience. Research limitations/implications Heterogeneous CEO and CSR variables and endogeneity concerns lower the validity of recent studies. Future research is encouraged to implement dynamic regression models, increase CSR and CEO proxies and focus on international samples with country-specific effects. Practical implications As CEO activities can have a major impact on CSR activities, the author recommends firms to search for opportunities to make their CSR strategy more comprehensive by their stakeholder communication, thus providing deeper insights into their CSR performance in line with stakeholders’ interests. Originality/value The paper is the first literature review on the interaction between CEO and CSR so far. The author explains the main CEO and CSR variables that have been included in research, stresses the limitations of the studies and gives useful recommendations for future research, practice and regulators.