CEO Tenure, Corporate Social Performance, and Corporate Governance: A Korean Study

Abstract

The purpose of this study was to examine the association between Chief Executive Officer (CEO) tenure and corporate social performance with the moderating effect of governance. We investigated whether new CEOs and CEOs in their last year of service were more focused on short-termism than CEOs of other periods. Specifically, we tested whether these CEOs reduced social performance that demands immediate expenditure and expect payoffs in the long run. We also tested whether good governance can mitigate such behaviors, because not all CEOs of the same tenure will act the same, depending on the monitoring environments surrounding them. We employed ordinary least squares (OLS) method and the moderator models using data from the Korean listed companies from 2012 to 2016. Test results showed that only the CEOs of their last year reduced social performance. However, when we considered corporate governance, we found that both groups of CEOs reduced social performance, and that good governance mitigated the adverse effects of the two periods on Corporate Social Responsibility (CSR). Specifically, we tested board independence, board frequency, CEO duality, and board diversity, and found that, for all but board independence, the negative effects of the two periods on social performance were decreased.

RETRACTED: The Relationship between CEO Psychological Biases, Corporate Governance and Corporate Social Responsibility

“…This intangible asset could be subdivided into classes relating to each of the three main themes of CSR (Park et al 2020): the social reputation of the employer on well-being at work; societal reputation with regard to stakeholders (customers, consumers, local communities, subcontractors); environmental reputation (Chyz et al 2019;Choi et al 2020).…”

Busyness, Tenure, Meeting Frequency of the CEOs, and Corporate Social Responsibility Disclosure

“…This study also observed the level of tenure and frequency of CEO meetings with corporate CSR disclosures. Referring to previous research [70][71][72], CEO tenure can be classified into several levels to clarify the results. In this analysis, CEO tenure was classified into two segments based on median value, namely 'long tenure' if the value was below the median (LONGER_TENURE) and 'very long tenure' if the value was above the median.…”

CSR disclosure and debt financing in India: does CEO tenure matter?

“…The years a CEO works as a corporate governance pillar affects CSR disclosure and financing decisions, including debt financing. Extant literature has examined CEO tenure and debt financing or CEO tenure and CSR disclosure (Choi et al. , 2020; Naseem et al.…”

“…, 2016). Studies have also focused on how corporate governance principles such as chief executive officer (CEO) tenure affect the pursuance of CSR activities (Tarus and Ayabei, 2016; Choi et al. , 2020; Kaur and Singh, 2021).…”

“…, 2020). Similarly, different studies have examined CEO tenure and other variables, including corporate social performance and capital structure (Tarus and Ayabei, 2016; Choi et al. , 2020; Kaur and Singh, 2021).…”