ESG and CEO turnover around the world

Gonul Colak; Timo Korkeamäki; Niclas Meyer

doi:10.1016/j.jcorpfin.2023.102523

ESG and CEO turnover around the world

Gonul Colak, Timo Korkeamäki, Niclas Meyer

School of Business

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Abstract

We investigate whether CEOs around the world are held accountable for stakeholder-related corporate misbehavior. The likelihood of CEO turnover increases significantly when the media coverage of the ESG incidents reaches extreme levels. CEO turnovers occur even in the cases where an incident does not lead to a stock price decline. In such cases, the board likely has a non-pecuniary motive for the turnover. This suggests that such non-pecuniary reputational concerns are an important determinant of CEO turnover decisions around the world, especially when the firm is facing intense public pressure due to stakeholder-related corporate misbehavior. This effect is more pronounced when firms are headquartered in stakeholder-oriented countries like many European countries.

Original language	English
Article number	102523
Number of pages	30
Journal	Journal of Corporate Finance
Volume	84
Early online date	15 Dec 2023
DOIs	https://doi.org/10.1016/j.jcorpfin.2023.102523
Publication status	Published - Feb 2024
MoE publication type	A1 Journal article-refereed

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10.1016/j.jcorpfin.2023.102523Licence: CC BY

1-s2.0-S0929119923001724-mainFinal published version, 2.75 MBLicence: CC BY

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ESG and CEO turnover around the world

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