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CEO Greed, Corporate Governance, and CSR Performance: Asian Evidence

Author

Listed:
  • Saif Ur Rehman

    (Faculty of Management, Canadian University Dubai, Dubai 117781, United Arab Emirates)

  • Yacoub Haider Hamdan

    (Business School, Al-Ahliyya Amman University, Amman 19328, Jordan)

Abstract

In this study, we examined the association between CEO greed and corporate social responsibility (CSR) performance with a particular emphasis on the curtailing role of corporate governance. We found that CEO greed has a negative effect on CSR, since an uncontrolled pursuit of personal gain typically reveals myopic behavior and the foregoing of investment in CSR by a greedy CEO. Additionally, we found that CEO compensation in the form of large bonuses, support, and restricted stocks options weakened the link between CEO greed and CSR. Concerning the power dynamics amongst CEOs (CEO duality and tenure), we found that CEO duality moderates the negative relation between CEO greed and CSR. We also explored the curtailing role of corporate governance (proxies represented by board gender diversity and board independence) in the association between CEO greed and CSR. Our findings show that gender diversity curtails the negative effect of CEO greed on CSR once it reaches critical mass on the corporate board. Gender critical mass also curtails the negative impact of CEO greed on CSR, even if the CEO exercises duality. Our findings have empirical and practical implications. This study contributes to the existing literature by exploring the relationship between CEO greed and CSR in Asia, a region not renowned for CSR performance. This study also provides evidence for the curtailing role of compensation and governance factors in the negative relationship between CEO greed and CSR.

Suggested Citation

  • Saif Ur Rehman & Yacoub Haider Hamdan, 2023. "CEO Greed, Corporate Governance, and CSR Performance: Asian Evidence," Administrative Sciences, MDPI, vol. 13(5), pages 1-29, May.
    • Handle: RePEc:gam:jadmsc:v:13:y:2023:i:5:p:124-:d:1139858
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    References listed on IDEAS

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    1. Eric A. Fong & Vilmos F. Misangyi & Henry L. Tosi, 2010. "The effect of CEO pay deviations on CEO withdrawal, firm size, and firm profits," Strategic Management Journal, Wiley Blackwell, vol. 31(6), pages 629-651, June.
    2. David A. Waldman & Donald S. Siegel & Mansour Javidan, 2006. "Components of CEO Transformational Leadership and Corporate Social Responsibility," Journal of Management Studies, Wiley Blackwell, vol. 43(8), pages 1703-1725, December.
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