Discussant: Michael DiNardi (Assistant Professor, Department of Economics)

CEO Risk Factor and Employee-Oriented Corporate Social Responsibility: The Moderating Conditions of CEO Backgrounds and Industrial Characteristics

Abstract:

This paper proposes and tests a modified version of the risk-management approach to corporate social responsibility (CSR), applied to the relationship between chief executive officer (CEO) and employees. The risk-management perspective for CSR argues that firms enhance CSR engagements to mitigate possible unfavorable outcomes from its risk factors. Still, we don’t know much about whether and how CEOs mitigate their risk factors by improving employee-oriented CSR (E-CSR). In order to fill this gap, this study examines two moderating conditions for the CEO risk-taking incentives and E-CSR link: (a) CEO backgrounds and (b) industrial characteristics. We test the proposed hypotheses with a longitudinal dataset of over 17,000 observations of large U.S. corporations for the period 1996-2016. The empirical findings offer a people-version of risk-management approach to CSR. Both theoretical and practical implications for CEO compensation and E-CSR are discussed.