Founder CEOs and ESG

Erik Devos, Zifeng Feng, Linh Thompson, Zuobao Wei

We examine the relation between a firm's environmental, social, and governance (ESG) performance and its CEO's founder status, an important but previously unexplored leadership attribute in this context. We find that founder-CEO-led firms exhibit superior ESG performance. We further document that founder CEOs impact firm ESG behavior through a reputation channel. Specifically, founder CEOs invest significantly more in ESG activities in highly visible firms than non-founder CEOs. Founder CEOs are also particularly mindful of their environmental reputation. On the other hand, in low visibility firms, founder and non-founder CEOs exhibit little differences in the overall ESG activities. The results are robust to controlling for various firm, CEO, and industry characteristics. Using CEO transitions from founder to non-founder status and vice versa, we conduct propensity score matching (PSM) differences-in-differences (DiD) robustness checks. Our baseline results continue to hold.

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Year of publication:	2024
Authors:	Devos, Erik ; Feng, Zifeng ; Thompson, Linh ; Wei, Zuobao
Published in:	International review of economics & finance : IREF. - Amsterdam [u.a.] : Elsevier Science, ISSN 1059-0560, ZDB-ID 2026509-8. - Vol. 94.2024, Art.-No. 103407, p. 1-19
Subject:	CSR \| ESG \| Founder CEO \| Reputation \| Corporate Social Responsibility \| Corporate social responsibility \| Führungskräfte \| Managers \| Unternehmensgründung \| Business start-up \| Nachhaltige Kapitalanlage \| Sustainable investment \| Firmenimage \| Corporate reputation \| Unternehmer \| Entrepreneurs

Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Other identifiers:	10.1016/j.iref.2024.103407 [DOI]
Source:	ECONIS - Online Catalogue of the ZBW

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