Abstract
The aim of this research was to provide further evidence of the impact of the power of the Chief Executive Officer (CEO) on corporate social responsibility (CSR) disclosure. Additionally, we explore the moderating role of CEO compensation linked to shareholder return on the association between CEO power and CSR disclosure. The theories used follow agency theory and stakeholder theory and the sample comprised 9182 international firm-year observations collected from the Thomson Reuters database from 2009 to 2018. Our model was estimated using the generalized method of moments (GMM) estimator. The results found that CEO power was positively associated with CSR disclosure, contrary to our expectations. Additionally, our evidence also shows that CEO compensation linked to shareholder return plays a positive moderating role on the relationship between CEO power and CSR reporting.
Highlights
A third reason to disclose corporate social responsibility (CSR) information stems from a feeling of obligation to do so due to various types of institutional pressure: firms are economic units that operate in the broader context of varied institutions that have an impact on their behavior and burden them with certain expectations [2]
Our CSR score was placed between 0.1 and 0.5 and, gave a moderate level of CSR disclosure for firms in our sample, according to the classification given in the dependent variable description
This paper examined how powerful Chief Executive Officer (CEO) in firms affect CSR disclosure
Summary
The reasons why companies disclose CSR information are varied Authors such as Campbell [2] state that a primary motivation may be to project a responsible image to a broad range of stakeholders; by presenting CSR reports, firms meet the stakeholders’ demands and contribute to society’s well-being [3,4]. A third reason to disclose CSR information stems from a feeling of obligation to do so due to various types of institutional pressure: firms are economic units that operate in the broader context of varied institutions that have an impact on their behavior and burden them with certain expectations [2] This explains why firms working in countries with similar institutions adopt similar behaviors.
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