RT info:eu-repo/semantics/article
T1 From dawn to dusk: The relationship between CEO career horizon and ESG engagement
A1 Cabreros González, David
A1 Fuente Herrero, Gabriel de la
A1 Velasco González, María Del Pilar
K1 ESG
K1 Prospect theory
K1 CEO career horizon
K1 Decision framing
AB This study investigates the influence of a CEO's career horizon on a firm's engagement in ESG. Given the private benefits which CEOs can extract from this strategy, we argue that a firm's willingness to pursue additional ESG efforts is likely to mirror CEOs' desire to strengthen their personal reputation and curb their perceived risk exposure at each stage of their career horizon. Drawing on the prospect theory, we theorize the decomposition of CEOs' career horizon into two counteracting forces (career concerns and legacy concerns) to explain how a CEO's effort in ESG could change depending on the length of the horizon and the influence of a reference point, such as their firm's performance relative to the industry benchmark. Using a sample of European listed companies from 2007 to 2018, our evidence supports an inverted U-shaped relationship between CEO career horizon and a firm's ESG engagement. This result shows the importance of a CEO's eagerness for personal reputation as a key antecedent of companies' ESG actions. However, a CEO's perceived risk exposure proves not to be a relevant driver of ESG, since we find that such a relationship is not sensitive to decision framing based on relative performance.
PB Elsevier
SN 1057-5219
YR 2024
FD 2024
LK https://uvadoc.uva.es/handle/10324/69821
UL https://uvadoc.uva.es/handle/10324/69821
LA eng
NO International Review of Financial Analysis, 2024, vol. 93, 103200.
NO Producción Científica
DS UVaDOC
RD 03-ene-2025