CEO Characteristics, Family Ownership and Corporate Social Responsibility Reporting: The Case of Saudi Arabia

Shaker Al-Duais,Wan Wan-Hussin,Hasan Bamahros,Abdulsalam Alquhaif,Ameen Qasem,Murad Thomran

doi:10.3390/su132112237

Abstract

Only a few studies have investigated the association between the characteristics of the chief executive officer (CEO) (i.e., tenure and local or expatriate) and corporate social responsibility (CSR) reporting. Our study adds to the fledgling literature by providing new evidence from Saudi Arabia. Given the dominance of family control among Saudi Arabian listed firms, additionally, this study examined the moderating effect of family ownership on the CEO-CSR relationship. Using CSR scores from Bloomberg database from 2010 to 2019 and ordinary least squares (OLS) regression, the findings reveal that the association between CEO tenure and CSR reporting is positively significant; however, the association between CEO nationality and CSR is not significant. In addition, the findings indicate that family ownership is an important contingency factor that explains the association between CEO tenure and CEO nationality, and CSR reporting. Our study contributes to an emerging line of CSR research that investigates the effects of foreign CEOs on CSR transparency, and supports prior evidence on the benefits to investors of having long-serving CEO and the costs of family entrenchment.

Highlights

The CEO_TEN coefficients were significantly positive (0.289 with a t-value of 4.14), meaning that longer-tenured chief executive officer (CEO) have a positive relationship with a firm’s corporate social responsibility (CSR) reporting. These findings suggest that CEOs who have been with the firm for a longer time are more interested in undertaking CSR practices
The study examined the association between CEO tenure and CEO nationality and CSR reporting
We further investigated whether or not family ownership affects that relationship, given that family firms are ubiquitous in Saudi Arabia

Summary

Introduction

Corporate social responsibility (CSR) has emerged as a critical and enduring topic that has attracted rapidly growing scholarly attention. This explosion reflects increasing awareness among firms of their roles and responsibilities to the community as well as the environment [1,2,3,4,5]. CSR participation by firms has been extensively scrutinized by the media, socially responsible investors, and numerous CSR rating agencies, such as Morgan Stanley Capital International, Sustainalytics, FTSE Russell, Bloomberg, and Thomson Reuters, and any CSR misconducts could have a significant impact on a firm’s reputation and its sustainability [6]. CSR reporting continues to vary greatly across firms, which has prompted several investigations into the determinants of a firm’s

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