Media Depictions of CEO Ethics and Stakeholder Support of CSR Initiatives: The Mediating Roles of CSR Motive Attributions and Cynicism

Corporate social responsibility (CSR) functions as a positive signal to stakeholders that a firm is a responsible corporate citizen. However, CSR is increasingly becoming an ambiguous signal of organizational goodwill because many companies engage in CSR purely out of self-interest, rather than genuine altruism. In this paper, we integrate attribution theory with signaling theory to explore how stakeholders react when they receive additional signals that contradict the company’s intended positive CSR signal. Specifically, we argue that morally questionable CEO ethics in the media negatively influences stakeholders’ CSR motive attributions, which in turn results in increased cynicism that ultimately impacts CSR support intentions and behaviors. We find support for our hypotheses in a quasi-experimental study of stakeholder media exposure to different types of CEOs (morally questionable, ethical, and ethics-unknown). Our findings demonstrate that stakeholders consider CEO ethics an important signal of CSR motives, and will shun the CSR initiatives of morally questionable CEOs.     

Why B-to-B CEOs Should Be More Social on Social Media

In the era of social media more is demanded of CEOs to project a charismatic and personable public face for the company. Aside from their executive duties, CEOs are now called upon to perform this important 'personal marketing' role through their active engagement on social media. Yet studies show that CEOs, especially those of B-to-B companies, are often reluctant to perform this function – less than 50% have any significant social media presence. All the same, it is evident that social media offers numerous benefits to CEOs both at firm and personal levels: greater transparency and trust, connecting with the public, engendering the perception of authenticity, and brand-building. Additionally, millennials, as an influential demographic group, practically expect corporate CEOs to be available to communicate on social media. This practitioner note concludes with recommendations for CEOs who are venturing into the social media space for the first time.     

CEO turnover,political connections,and firm performance: Evidence from China

In our analysis of 5738 CEO turnover events among A-share listed companies in China over the period of 1993 to 2019, we find that CEO turnovers on average hurt companies' market performance with significant negative abnormal returns in the event window. We then group the companies into four types based on whether the outgoing and successor CEOs have political connections, and then calculate the abnormal returns in the event windows of CEO turnovers once announced. We find that companies generally enjoy positive abnormal returns if they replace politically non-connected CEOs with connected ones. Such a positive effect is more evident among non-state-owned enterprises (non-SOEs), companies with worse performance, and companies with higher financial constraints. However, abnormal returns derived from hiring politically connected successor CEOs turn to negative following China's massive anti-corruption campaign in 2012. Our findings provide direct estimations of the economic value of CEOs' political connections for A-share listed companies in China and reveal boundary conditions that moderate the influence of hiring politically connected CEOs.     

An Ethical Perspective on CEO Compensation

The controversial issue of whether Chief Executive Officer (CEO) compensation is excessive or appropriate is examined in terms of two competing claims: that CEOs are overpaid for the value they provide to an enterprise, and that CEO compensation is inherently equitable. Various arguments and perspectives on both sides of the issue are assessed. Little evidence supports the claim that CEO performance justifies very high compensation. Further, the complex interactive alliance between boards of directors and CEOs compromises rational decision-making about CEO compensation, with the Enron affair offered as an illustration of what can go wrong when dishonest CEO actions combine with lax board oversight. Recommendations for restoring trust in the system include continuing current regulatory actions, using different metrics for determining CEO compensation, making board member-CEO relationships transparent to all company stakeholders, and several more radical ideas for change. Stakeholders must resist being distracted by other social, economic, or political issues from pursuing serious, lasting reform.     

When the CEO is ill: Keeping quiet or going public?

CEOs represent the pinnacle of leadership in organizations. In addition to power and prestige, constant media scrutiny and pressures to exceed past levels of firm performance are often associated with this role. Although CEOs may rely on other top managers for input regarding operational decisions and long-term planning, the outcomes of strategic initiatives rest solely on their shoulders. Moreover, how CEOs are depicted in the press can greatly affect public opinion about their organizations. In recent years, CEO health and health concerns have made headlines for such well-known companies as McDonald's, Clorox, Pilgrim's Pride, and EarthLink. In this article we discuss the ramifications of disclosure and non-disclosure of serious CEO health issues, and their potential impact on shareholder wealth and succession planning. We conclude by offering a few thoughts about the future direction of CEO health.     

Company reputation and its influence on consumer trust in response to ongoing CSR communication

There is considerable disagreement in academic scholarship and beyond as to whether, in cases of bad reputations, companies will want to communicate corporate social responsibility (CSR) activities because this kind of communication is likely to increase consumers’ skepticism. In this regard, the two empirical studies discussed in this article examine the influence of prior company reputation on consumers’ trust in response to CSR communication in general and the development in response to continuous CSR activities and their ongoing communication by companies as well as by the media in particular. The two studies show that consumers’ trust in companies’ CSR activities increases after a second presentation of information by companies even in instances when companies had prior negative reputations. The second study in particular fills a gap in the literature on underlying mechanisms of consumers’ reactions to CSR communication. The results suggest that companies with prior negative reputations do not need to remain silent about their CSR activities; instead, CSR communication can help improve consumers’ trust in companies. However, the findings of these two studies also suggest that this positive development is short-lived. Consumers’ developing trust in companies’ CSR activities decreases significantly if they are exposed to negative information on these companies.     

In CEOs we trust: When religion matters in cross-border acquisitions. The case of a multifaith country

This paper examines the emergence of trust by multifaith target-firm personnel in foreign acquirer CEOs during early post-acquisition integration, a decisive period for acquisition success, yet considerably under-researched. Combining self-categorization and similarity-attraction theories, we argue that religious similarity with the foreign acquirer’s CEO represents shared values to the personnel, from which trust in the CEO arises. Further, we scrutinize the moderating effects of the personnel’s religiosity and prior alliance success between the acquirer and target firm. We test our model using field-experimental data from 411 multifaith Malaysian personnel. The findings show that personnel-leader trust occurs more readily with religious similarity than religious dissimilarity, and that the personnel’s religiosity strengthens this relationship. However, a successful prior alliance does not weaken the religious similarity–trust relationship. Our research encourages acquisition managers to consider religion, a factor beyond the traditional acquisition playbook, as a trust antecedent during early post-acquisition integration.     

The CEO's Influence on Corporate Foundation Giving

Some scholars have argued that CEOs may have excessive influence on their foundation's trustees to give away a portion of company profits to charitable causes in order to gain access to elite circles or support the CEO's personal causes. This may result in charitable contributions that ultimately serve the personal interests of the CEOs without regard to corporate interests or social needs. We examine the extent that CEOs appear to direct charitable giving to be compatible with their own personal interests, and if CEO participation on the foundation board affects the relationship between CEO personal interests and charitable giving. Using a sample of 160 corporate foundations, our results showed that CEOs' interests, as measured by membership in different non-profit organizations, was associated with foundation charitable giving. This association decreased, but was not eliminated, when CEOs were absent from the foundation board. Implications of these findings for researchers and managers are discussed in regards to both agency theory and stewardship theory.     

CEO career concerns and investment efficiency: Evidence from China

This paper investigates the impact of CEO career concerns on a firm's investment efficiency for publicly listed Chinese companies from 2002 to 2009. We use CEO age and appointment of new CEO as proxies for CEO career concerns. For the whole sample, we demonstrate that younger CEOs and newly appointed CEOs are prone to invest less and more efficiently. We divide our sample into state-owned enterprises and non-state-owned enterprises, depending on their ultimate ownership. The age effect seems stronger in state-owned enterprises and the new appointment effect seems stronger in non-state-owned enterprises. Our results indicate that CEOs have long-term career concerns that can improve a firm's investment efficiency even in a transitional economy such as China.     

Dollars and sense: The implications of CEO compensation for organizational performance

Crafting a compensation package for an organization's chief executive officer (CEO) that will help the firm maximize its performance is a vexing challenge for a board of directors. Management theory offers boards several practical hints. A board can put its CEO and the firm in the best position to be successful by (1) creating strong incentives for the CEO to act in the firm's best interest at all times; (2) benchmarking a CEO's performance and compensation relative to that of very high performing CEOs in the industry; (3) diagnosing and responding to CEOs’ feelings about equity relative to their peers; (4) paying a CEO with uniquely valuable knowledge, skills, and ability at the top of the market; (5) offering retention incentives if a proven performer with unique skills is leading a company; (6) resisting the temptation to simply mimic the compensation packages that work for leading firms; and (7) considering candidates’ social ties when recruiting a new CEO.     

CEO性别、产权性质与公司过度投资行为

CEO作为公司最高决策者,控制着资源配置权及处于核心地位的投资决策权,性别作为其最重要的个人特征之一,会对公司投资行为产生重要影响.本文基于中国A股上市公司样本数据,研究CEO性别对公司过度投资行为的影响,结果显示,女性CEO可以在一定程度上降低国有上市公司的过度投资程度.同时,CEO性别未对公司的过度投资倾向产生重要影响.本文拓展了现有高管背景特征和公司投资行为方面的研究,对于认识公司不同性别高管的过度投资行为,以及不同产权制度对微观主体或个体经济行为的影响,均具有重要的理论与现实意义.     

The Role of Trust in Understanding the Impact of Social Media Marketing on Brand Equity and Brand Loyalty

Abstract

In this era, social media platform is integrated into the marketing strategy. This new technology sets out new mechanisms and communication tools that companies can rely on to interact and engage with actual and potential customers. This study aimed at exploring the impact of social media marketing activities (SMM) on brand loyalty via brand trust and brand equity. Based on an online survey of 287 users who follow telecommunications companies on social media located in Egypt, data was collected and analyzed using structural equation modeling. The results revealed that SMM activities comprise only three dimensions; trendiness, customization and word-of-mouth. These attributes of social media marketing directly influence brand loyalty and indirectly influence brand equity mediated by brand trust. The study emphasis the role of trust and provide guidance toward measuring the effectiveness of social media marketing.     

Founder CEOs,personal incentives,and corporate social irresponsibility

This study integrates organizational identity (OI) theory and upper echelons theory to explore the impact of CEOs’ founder status on corporate social irresponsibility (CSI). We theorize that compared with other CEOs, a founder CEO is more likely to generate a high degree of OI with the firm, which will drive the founder CEO to actively avoid CSI that may damage the positive image and long-term development of the firm. Furthermore, we argue that CEO duality and CEO ownership will strengthen the aforementioned relationship by increasing the possibility of founder CEOs generating a high degree of OI. Conversely, CEO underpayment will weaken the relationship between founder status and CSI by decreasing the possibility of founder CEOs generating a high degree of OI. We obtained empirical evidence in support of our arguments from a large Chinese private listed company dataset. Overall, this study’s theory and evidence clearly show that founder status and personal incentives can jointly shape CEOs’ CSI decisions, thereby providing useful insights for corporate shareholders and government agencies to better prevent and govern firms’ CSI.     

Do Auditors Applaud Corporate Environmental Performance? Evidence from China

This paper examines the relationship between turnover among chief executive officers (CEOs) and corporate sustainability performance (CSP) by identifying the influence of two major types of succession to the top job (internal or external promotion) and the reasons for change. Our model also integrates the firm’s past prioritization of CSP and the impact of a company’s participation in the Global Reporting Initiative (GRI). Upper echelons theory and agency theory frameworks are adopted to understand CSP. Using an analysis of panel data for 88 public companies across 13 years in France, we find that a change of chief executive has a positive and significant effect on CSP 5 years after the change. This positive effect is stronger when the new CEO is recruited from outside the firm. The impact on CSP is invariably positive and significant, except for voluntary departures. The arrival of a new CEO affects CSP less when the firm has already achieved a high standard of CSP and participates in the GRI. These results are obtained after controlling CSP determinants already validated in the literature (financial performance, size, profitability, etc.). The findings show that expectations of CEOs are not solely economic and financial but also concern CSP. In terms of governance, they should prompt shareholders looking to strengthen CSP to choose new CEOs from outside the firm and to encourage the firm to participate in the GRI.     

Dimensions and Levels of Trust: Implications for Commitment to a Relationship

Previous research has found that trust is positively related to commitment in buyer-seller relationships. However, the validity of this finding is questionable because trust has been operationalized in many different ways. For example, prior research has not distinguished among levels of trust (interpersonal or organizational trust) and dimensions or motives of trust (credibility or benevolence). In this study, we distinguish among the levels and dimensions of trust. The results indicate that trust in a sales representative (interpersonal credibility) is more strongly related to commitment than trust in an organization (organizational credibility). In contrast, trust based on organizational benevolence is a stronger predictor of commitment than interpersonal benevolence.     

商业“她时代”萌芽下的中国“裙子CEO”资本初探

对于"裙子CEO",早已引起社会广泛关注。研究显示:人力资本、社会资本以及人丽资本三者共同促成了女CEO这一特殊人才的形成。其人力资本与企业绩效是成正相关,发挥作用最大;社会资本这把双刃剑对于女CEO来说还是处于一个"凸弧"的上升阶段,还未发挥其最大的效用,有待开发;人丽资本对女CEO工作是有帮助的。研究同时表明:人力资本的形成过程中,IQ比EQ起的作用要稍大一些,说明在社会资本的组成里,情商要比智商更加重要。研究成果进一步表明,不仅人们不能带着有色眼镜看待女CEO,而且为正在奋斗成为女CEO路上的女高官以及普通女职员们指明了一个正确的职业导向,即加强学习,努力增强自己的人力资本,才能尽快地化茧成蝶。     

Multidimensional trust building in e-retailing: Cross-cultural differences in trust formation and implications for perceived risk

The importance of trust in consumers' purchase decisions in e-retailing is of significant interest to retailers. As retailing becomes increasingly globalized, retailers are more interested in cultural differences related to purchase decisions. This empirical study researches how cultural factors are related to multiple dimensions of trust and trust building. Although previous research has examined the influence of trust as a one-dimensional construct, this research examines three dimensions of the trust construct—competence, benevolence and integrity. This research proposes that cultural values will have an impact on how consumers with Eastern vs. Western cultural backgrounds form their trust of e-retailers and how that trust influences their interactions with e-retailers. It focuses on differences between USA (n=252) and Korean (n=256) online customers. It examines how two significant trust forming antecedents, reputation and website quality, affect the three dimensions of trust in the two different cultures, and how the trust dimensions impact two significant consequences, willingness to depend on the e-retailer and related perceptions of risk when dealing with e-retailers.     

Conflicting Objectives within the Board: Evidence from Overlapping Audit and Compensation Committee Members

The board of directors is an elite group that faces multifaceted tasks. The board needs to implement decisions on a wide variety of subject matter. These decisions are often delegated to specialized sub-committees within the board. The different objectives of each sub-committee can result in conflicting interests leading to decisions that are sub-optimal. For example, at times, the objectives of the compensation and the audit committee are not aligned. The objective of compensation committees is to grant CEOs compensation packages reflective of their performance. Yet, these compensation packages might contain incentives that could motivate CEOs to influence the financial reporting process in order to reflect better performance, increasing the risk of poor quality financials. In contrast, the objective of audit committees is to oversee the quality of the financial reports and the process that leads to them. Therefore, they would favor compensation packages that reduce the risk of earnings manipulation. We examine public companies that have overlapping compensation and audit committee members and find a higher proportion of CEO incentive compensation in companies with less overlap among audit and compensation committee members. These results suggest that separating the members within these committees might contribute to the effectiveness of board decisions. Data availability: Data are publicly available from sources identified in this paper.     

Trusting and Monitoring Business Partners throughout the Relationship Life Cycle

Purpose: The goal of this research is to understand the theoretical and empirical confluence of multi-dimensional trust with the role of monitoring as business partnerships unfold and evolve dynamically throughout the course of the relationship life cycle.

Methodology: A pilot study is run in which in-depth interviews are conducted with managers to glean their insights regarding the theoretical questions and to verify terminology for survey items. A large-scale survey study is then conducted to test hypotheses about the relationships among the focal constructs. The participants in both studies are real procurement professionals reporting on their primary supplier relationships. The qualitative study and the samples of real world managers enhance the external validity of this research.

Findings: In early stages of business relationships, monitoring and benevolence trust interact to positively impact business performance. Continued monitoring in later stages interact with benevolence trust to performance detriment. Conversely, monitoring and competence aspects of trust hurt business performance in earlier life stages.

Research Implications: Theoretical frameworks that include the constructs of multidimensional trust, monitoring, and relationship life cycle stages can build on the nuanced 3-dimensional contingencies established in this research. In particular, this research furthers the concepts of monitoring and the relationship life cycle.

Practical Implications: There is a time and a place to trust one's business partners, and a time and a place to verify their trustworthiness. As business partnerships are forged, monitoring and benevolence trust can be particularly fruitful.

Contribution: In this research, the authors build on the business marketing literature that has begun to delineate the benevolence and competence dimensions of trust in business relationships; they demonstrate the role that partner monitoring has in maintaining business commitments; and establish how these effects are modified over the stages of the relationship life cycle; i.e., from exploration, to build-up, maturity, and decline.     

CEO retirement compensation: Is inside debt excess compensation or a risk management tool?

CEOs face constant scrutiny over their compensation packages. This scrutiny has only intensified amid discussions of CEO-to-employee pay ratios and income inequality nationwide. CEO retirement packages are criticized as camouflage compensation used to award excessive compensation to CEOs and were, prior to 2006, less transparent than they are now. Thanks to the transparent disclosures now required by the SEC, we have a better understanding of the types and amounts of compensation owed to CEOs after they depart or retire, termed inside debt. I investigate whether all CEO inside debt components share similar incentive effects and offers some thoughts on how companies might structure these packages to be most effective. I discuss the structure and incentive effects of the two primary components of inside debt: deferred compensation and supplemental executive retirement plans (SERPs). I explain why inside debt, particularly CEO SERPs, may actually help companies manage firm risk. Finally, I outline the best ways to structure inside debt so that it functions as a resource to manage firm risk and foster a long-term perspective rather than mirroring the incentive effect of equity, increasing risk, and encouraging a myopic focus.