Corporate the expense of society and the

Corporate social responsibility (CSR) is a concept commonly known
as a positive initiative by businesses of doing good. An increasing number of
corporations both domestic and multinational adopt practices that focuses on
transparency, by reporting financial, social and environmental aspects, and
actively engaging with stakeholders to create a positive impact on society. (Idowu, 2013)

The concept of corporate social responsibility coheres with
concepts such as sustainability, accountability, responsibility and ethics in
business. It is a concept that has been around for over five decades yet still
finds different practical perceptions by those seeking to describe it. Three
different schools of thought exist with each a different perception of
corporate social responsibility (Idowu, 2013). The first school supports
the neoliberal view of Milton Friedman which sees CSR merely as a practice for
businesses to increase its profits with a deontological perspective. The second
school of thought, neo-Keynesian, sees CSR as way for businesses to avoid
problems caused by corporate behavior, and achieve desired social and economic
goals such as sustainability. The third school of thought concerns the radical
political economy approach. It views corporations “as possessing enormous
power, which is often wielded ruthlessly in their own self-interest and
frequently at the expense of society and the environment” (Idowu, 2013). They desire forced
measures and make corporations accountable for their malpractices.

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CSR is defined as “actions that appear to further some social
good, beyond the interests of the firm and that which is required by law”(Mcwilliams & Siegel, 2001) It composes a variety of actions used by businesses to serve a broader
group of stakeholders instead of its capital owners such as employees,
suppliers, governments, communities and society as whole. Examples such as
developing progressive management programs, reusing products, reducing
pollution and supporting local businesses are seen as CSR initiatives (Mcwilliams & Siegel, 2001).

There are a variety of studies that studied the influence of a
firm’s advances in CSR as described by Chin, Hambrick and Trevino. The emphasis
has been primarily on external influences in the global business environment
such as the business country, government regulations, consumers, and local
communities have been researched as factors driving CSR (Chin, Hambrick, & Treviño, 2013).

In recent years however, there is an increase in research that
tackles the question of internal influences on CSR. The main driver of this
research is the upper echelons theory of Hambrick and Mason. The theory, states
that “organisational outcomes, strategic choices and performance level, are
partially predicted by managerial background characteristics” (Chin et al., 2013). The paper attempts to describe a new theory and attempts to
develop a research stream focusing on this theory

This resulted in research that found influences by management and
top executives when looking at the practice of CSR (Gantt et al., 2003; Hemingway & Maclagan, 2004; Muller
& Kolk, 2010; Waldman, Siegel, & Javidan, 2006). Building upon these findings Chin, Hambrick and Trevino, analyzed the political ideologies of
CEO’s and its influence on CSR (Chin et al., 2013). Followed by Fabrizi, Mallin and Michelon , who investigated the
CEO’s personal incentives (equity, bonus, age, power and entrenchment) and its
role on driving corporate social responsibility (Fabrizi, Mallin, & Michelon, 2014). Another research focused on CEO characteristics (age, gender,
nationality, educational specialization, and tenure) and its effect on their
firm’s CSR performance (Huang, 2013). The findings of these
three studies showed that certain CEO’s characteristics have an influence on
the firms advances in CSR.


In line with prior research towards the influence of CEO
characteristics on company’s advances in CSR, this paper aims to identify which
specific characteristics have a positive influence on CSR advances,
specifically with regard to publicly listed firms in Europe. Furthermore, if
present, this research shall shed light on potential mediating or moderating

As such, the following research question has been formulated:
“To what extent are CEO characteristics able to positively influence advances
in CSR of the respective publicly listed firms in Europe?”

Following the above research question, the research aims to
identify whether specific CEO characteristics and traits (e.g. age, tenure,
academical specialization, nationality, narcissism, gender, and political
association) can either positively or negatively affect the CSR advances of
their respective firms, and the corresponding effect of the relationship
between the two variables.

In order to operationalize the above research question Hypothesis
1 (see table 1) has been defined, followed by the conceptual model. This will
allow for more accurate research towards the variables to be measured, setting
CEO characteristics as Independent variable (IV) and CSR advances as Dependent
variable (DV)

Based on a sample of 392 observations, (Huang, 2013) investigated a potential
relationship between CEO’s Demographic characteristics (i.e. Age, Gender,
Nationality, Educational specialization, and Tenure) and their respective
firm’s consistency (Number of appearances) in the results of major ranking
agencies concerning CSR performance.

In conclusions, the research established that a firm’s CSR
performance is significantly affected when the respective CEO’s educational
specialization equaled either MBA or MSc, with effect sizes of 1.041 and 1.056,
respectively. Furthermore, both CEO tenure and gender, as well as company
employee size showed a significant relationship with CSR performance, with
effect sizes of 0.033, -0.689, and 1.032, respectively (Huang, 2013)

The above effect sizes have been derived from table 2, following
model Q, as seen below (Huang, 2013). Considering the mentioned
effect size, it could be that especially the CEO characteristics educational
specialization (i.e. MBA and MSc) as well as Employee size show very strong
effect sizes which are statistically highly significant, and thus would be
valuable to future research.

This article observes the influence of a CEO’s political ideology
and its effect on organizational outcomes concerning corporate social
responsibility. They hypothesize that (1) liberal CEOs emphasize CSR more than
conservative CEO’s; (2) the association between a CEO’s political ideology and
CSR will be augmented by the CEO’s power; and (3) liberal CEO’s emphasize CSR
more albeit recent financial performance is low while conservative CEO’s only
pursue CSR when financial performance allows it (Chin et al., 2013)

They used a sample of 249 CEO’s, measuring their ideology by using
political donations. The independent variable is the political ideology of a
CEO and the dependent variable is corporate social responsibility. This
variable was measured by using KLD ratings that measure each company’s annual
CSR profile (Chin et al., 2013).

In conclusion using generalized estimating equations (GEE), model
2 (H1) shows the main effect (1.16) of the political ideology on CSR and shows
a significant positive association with CSR (P<.05). Model 3 (H2) shows whether this association is amplified by CEO's power and shows a significant positive effect (3.46) for the interaction with the political ideology (P<.05). Model 4 (H3) shows whether the recent firm's performance negatively moderates with the CEO's ideology and CSR advances. The results show a significant negative (-0.44) interaction of CEO's ideology and firms performance (P<0.05) (Chin et al., 2013). Aforementioned results, concerning CEO characteristic political ideology significantly shows that it affects firm's advances in CSR. This study explores the role of CEO's monetary and non-monetary incentives in relation with CSR. They hypothesize that (H1) CEO's equity incentives are associated with CSR; (H2) CEO's annual bonus is negatively associated with CSR; (H3) a departing (incoming) CEO is less (more) likely to engage in CSR); (H4) CEO's age is positively associated with CSR and, (H5) CEO's power and entrenchment are positively associated with CSR (Fabrizi et al., 2014). The study uses three different analysis to strengthen the accuracy. The first analysis is with OLS (Fabrizi et al., 2014). In the OLS analysis, H1 is supported since the effect (-0.3775) shows that when the CEO's wealth is more strongly related to stock prices, CSR practices are low. H2 is supported since the effect (-0.0260) shows that the amount of annual bonuses is negatively related to CSR activities which indicate CEO's belief that CSR practices may negatively impact the firm's current profits. H3 is supported since the effect (0.0924) shows that incoming CEO's are associated with higher scores on CSR. H4 is not supported since the effect (0.0004) shows a nonsignificant coefficient. H5 is supported since the effect (0.0370) shows that CEO's with higher power and entrenchment engage in CSR in a larger extent (Fabrizi et al., 2014). In the three-stage least squares with simultaneous equations (3SLS) and two-stage least squares with instrumental variables (2SLS). All results support the OLS analysis except for H4. H4 now shows, although small, an association (0.0114; 0.0104) showing that older CEO's with lower career concerns are more likely to engage in CSR activities than younger CEO's (Fabrizi et al., 2014). Aforementioned results show that CEO characteristics such as age, power, entrenchment, financial incentives and years in office have an influence on a firm's CSR practices.