Does CEO–Audit Committee/Board Interlocking Matter for Corporate Social Responsibility?

This study examines the impact of the Chief Executive Officer (CEO)’s interlocking, created through serving on other companies’ audit committees and/or boards, on corporate social responsibility (CSR) performance of the focal company (interlocked CEO’s company) and that of its linked companies. We f...

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Bibliographic Details
Published in:Journal of business ethics 2022-09, Vol.179 (3), p.819-847
Main Authors: Bose, Sudipta, Ali, Muhammad Jahangir, Hossain, Sarowar, Shamsuddin, Abul
Format: Article
Language:English
Subjects:
Accounting
Audit committees
Audits
Boards of directors
Business and Management
Business Ethics
Business schools
Chief executive officers
Chief executives
Committees
Companies
Directors
Education
Ethics
Executives (Business)
Financial performance
Interconnections
Management
Management teams
Original Paper
Philosophy
Propensity
Quality of Life Research
Selection bias
Social networks
Social responsibility
Stockholders
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Summary:This study examines the impact of the Chief Executive Officer (CEO)’s interlocking, created through serving on other companies’ audit committees and/or boards, on corporate social responsibility (CSR) performance of the focal company (interlocked CEO’s company) and that of its linked companies. We find that CEO interlocking positively affects CSR performance of both the focal company and its linked companies. Further analysis shows that interlocks created by the CEO enhance CSR performance and in turn the financial performance of both the focal company and its linked companies. Our findings are robust to a battery of analyses, including Heckman’s (1979) selection bias correction, propensity score matching (PSM), alternative measures of CSR performance, and CEO interlocks. These findings are important to regulators, company management teams, and other stakeholders with an interest in how the social ties of CEOs influence companies’ CSR performance and in the CSR–financial performance nexus.
ISSN:0167-4544
1573-0697
DOI:10.1007/s10551-021-04871-8