Effects of CEO Tenure and Education on Corporate Social and Environmental Performance: Evidence from Listed Firms on Namibia Stock Exchange
DOI:
https://doi.org/10.54536/ajee.v3i1.2592Keywords:
Corporate Social Performance, Environmental Performance, Chief Executive Officer (CEO)Abstract
Given the increasing focus on sustainability and corporate responsibility, it is essential to comprehend the influence of CEO characteristics on the accomplishment of a company. The main objective of this research is to investigate the correlation between the length of time a CEO serves in their position, their level of education, company corporate social performance, and environmental performance. The study utilized a descriptive research design, employing a quantitative method by conducting a cross-sectional survey. The study sample comprised Chief Executive Officers (CEOs) from 52 publicly traded businesses, and the analysis was based on 39 collected responses. With the help of SPSS, a multiple regression analysis was performed to evaluate the influence of CEO term of office and education on business social performance and environmental performance. The results indicate that CEO tenure has a favorable and substantial influence on environmental performance, whereas CEO education substantially influences corporate social performance. The results offer useful insights into the complex correlation between CEO characteristics and sustainability success. We propose policymakers to implement restrictions or recommendations for the length of time a CEO can hold their position and their educational qualifications. This will help ensure the efficient management of social and environmental responsibilities. Moreover, providing incentives for CEOs and high-level executives to participate in continuous education and training programs could boost their comprehension of social and environmental matters, ultimately leading to the implementation of enhanced sustainability practices within organizations.
Downloads
References
Ağan, Y., Kuzey, C., Acar, M. F., & Açıkgöz, A. (2016). The relationships between corporate social responsibility, environmental supplier development, and firm performance. Journal of Cleaner Production, 112, 1872-1881.
Aldrugi, A. M. (2013). Environmental disclosure in the Libyan oil and gas sector [Doctoral dissertation, Nottingham Trent University].
Ali, A., & Zhang, W. (2015). CEO tenure and earnings management. Journal of Accounting and Economics, 59(1), 60-79.
Amore, M. D., Bennedsen, M., Larsen, B., & Rosenbaum, P. (2019). CEO education and corporate environmental footprint. Journal of Environmental Economics and Management, 94, 254-273.
Apreku-Djana, P. K., Ayittah, S. K., Apreku, I. K. O., Ameyaw, F., & Opare, E. A. (2023). The Mediating Effect of Corporate Social Responsibility and Corporate Accountability in the Relationship between Corporate Governance and Value-Based Financial Performance of Banks. International Journal of Business, 28(2), 1-36.
Arano, K., Parker, C., & Terry, R. (2010). Gender-based risk aversion and retirement ass et al location. Economic Inquiry, 48(1), 147-155.
Asante Antwi, H., Zhou, L., Xu, X., & Mustafa, T. (2021, April). Beyond COVID-19 pandemic: an integrative review of global health crisis influencing the evolution and practice of corporate social responsibility. Healthcare, 9(4), 453.
Ason, Y. J., Bujang, I., Jidwin, A. P., & Said, J. (2021). A manifestation of accounting conservatism: A case study in Malaysia. The Journal of Asian Finance, Economics and Business, 8(2), 365-371.
Bell, E., Bryman, A., & Harley, B. (2022). Business research methods. Oxford University Press.
Berrone, P., Fosfuri, A., & Gelabert, L. (2017). Does greenwashing pay off? Understanding the relationship between environmental actions and environmental legitimacy. Journal of Business Ethics, 144, 363-379.
Bhagat, S., Bolton, B. J., & Subramanian, A. (2010). CEO education, CEO turnover, and firm performance. [Working Paper]. Available at SSRN 1670219.
Bhattacharyya, S. S., & Verma, S. (2020). The intellectual contours of corporate social responsibility literature: Co-citation analysis study. International Journal of Sociology and Social Policy, 40(11/12), 1551-1583.
Callan, S. J., & Thomas, J. M. (2011). Executive compensation, corporate social responsibility, and corporate financial performance: a multi-equation framework. Corporate Social Responsibility and Environmental Management, 18(6), 332-351.
Chatterjee, A., & Hambrick, D. C. (2011). Executive personality, capability cues, and risk-taking: How narcissistic CEOs react to their successes and stumbles. Administrative Science Quarterly, 56(2), 202-237.
Chen, H. L. (2011). Does board independence influence the top management team? Evidence from strategic decisions toward internationalization. Corporate Governance: An International Review, 19(4), 334-350
Custódio, C., & Metzger, D. (2014). Financial expert CEOs: CEO’s work experience and firm’s financial policies. Journal of Financial Economics, 114(1), 125-154.
Darmadi, S. (2013). Board members’ education and firm performance: evidence from a developing economy. International Journal of Commerce and Management, 23(2), 113-135.
De Villiers, C., Naiker, V., & Van Staden, C. J. (2011). The effect of board characteristics on firm environmental performance. Journal of Management, 37(6), 1636-1663.
Deschênes, S., Rojas, M., Boubacar, H., Prud’homme, B., & Ouedraogo, A. (2015). The impact of board traits on the social performance of Canadian firms. Corporate Governance, 15(3), 293-305.
Freeman, R. E. (1984). Strategic management: A stockholder approach. Pitman.
Guo, M., & Zheng, C. (2021). Foreign ownership and corporate social responsibility: evidence from China. Sustainability, 13(2), 508.
Hamori, M., & Koyuncu, B. (2015). Experience matters? The impact of prior CEO experience on firm performance. Human Resource Management, 54(1), 23-44.
Hartnell, C. A., Kinicki, A. J., Lambert, L. S., Fugate, M., & Doyle Corner, P. (2016). Do similarities or differences between CEO leadership and organizational culture have a more positive effect on firm performance? A test of competing predictions. Journal of Applied Psychology, 101(6), 846.
He, H., & Harris, L. (2020). The impact of Covid-19 pandemic on corporate social responsibility and marketing philosophy. Journal of Business Research, 116, 176-182.
Helm, S. (2011). Employees’ awareness of their impact on corporate reputation. Journal of Business Research, 64(7), 657-663.
Hou, W., Priem, R. L., & Goranova, M. (2017). Does one size fit all? Investigating pay-future performance relationships over the “seasons” of CEO tenure. Journal of Management, 43(3), 864-891.
Hsu, C. W., Lien, Y. C., & Chen, H. (2015). R&D internationalization and innovation performance. International Business Review, 24(2), 187-195.
Jensen, M. C., & Meckling, W. H. (2019). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Corporate Governance, 19(2), 77-132.
Joshi, S., & Kansil, R. (2023). Looking at and beyond corporate governance in India: A journey of three decades of reforms. Springer Nature.
Khan, T. M., Gang, B., Fareed, Z., & Yasmeen, R. (2020). The impact of CEO tenure on corporate social and environmental performance: An emerging country’s analysis. Environmental Science and Pollution Research, 27(16), 19314-19326.
Khoo, K. (2022). Common ownership and corporate social responsibility: Evidence from the Blackrock-BGI merger. SSRN.
Kokeno, S., & Muturi, W. (2016). Effect of chief executive officer’s characteristics on the financial performance of firms listed at the Nairobi Securities Exchange. International Journal of Economics, Commerce and Management, 4(7), 307-318.
Kubareva, I., Maliarchuk, O., & Pohuda, N. (2018). Corporate social responsibility of Ukrainian tourist enterprises: Identity, strategy and performance. Eastern Journal of European Studies, 9(2), 145.
Laplume, A. O., Sonpar, K., & Litz, R. A. (2008). Stakeholder theory: Reviewing a theory that moves us. Journal of Management, 34(6), 1152-1189.
Li, Y., & Tan, C. H. (2013). Matching business strategy and CIO characteristics: The impact on organizational performance. Journal of Business Research, 66(2), 248-259.
Linck, J. S., Netter, J. M., & Yang, T. (2008). The determinants of board structure. Journal of Financial Economics, 87(2), 308-328.
Luo, X., Kanuri, V. K., & Andrews, M. (2014). How does CEO tenure matter? The mediating role of firm-employee and firm-customer relationships. Strategic Management Journal, 35(4), 492-511.
Malik, F., Wang, F., Naseem, M. A., Ikram, A., & Ali, S. (2020). Determinants of corporate social responsibility related to CEO attributes: An empirical study. Sage Open, 10(1), 2158244019899093.
Martínez-Sola, C., García-Teruel, P. J., & Martínez-Solano, P. (2014). Trade credit and SME profitability. Small Business Economics, 42(3), 561-577.
Mason, C., & Simmons, J. (2014). Embedding corporate social responsibility in corporate governance: A stakeholder systems approach. Journal of Business Ethics, 119(1), 77-86.
Najmuddin, O., Deng, X., & Bhattacharya, R. (2018). The dynamics of land use/cover and the statistical assessment of cropland change drivers in the Kabul River Basin, Afghanistan. Sustainability, 10(2), 423.
Naseem, T., Shahzad, F., Asim, G. A., Rehman, I. U., & Nawaz, F. (2020). Corporate social responsibility engagement and firm performance in Asia Pacific: The role of enterprise risk management. Corporate Social Responsibility and Environmental Management, 27(2), 501-513.
Ndalu, T. C., Ibanichuka, E. A. L., & Ofurum, C. O. (2021). Board characteristics and environmental disclosure of quoted oil and gas firms in Nigeria: The moderating role of firm size. International Journal of Innovative Finance and Economics Research, 9(4), 51-62.
Peni, E., & Vähämaa, S. (2012). Did good corporate governance improve bank performance during the financial crisis? Journal of Financial Services Research, 41(1-2), 19-35.
Pérez, A., & Rodríguez del Bosque, I. (2013). Measuring CSR image: Three studies to develop and to validate a reliable measurement tool. Journal of Business Ethics, 118(2), 265-286.
Saridakis, C., Angelidou, S., & Woodside, A. G. (2023). How historical and social aspirations reshape the relationship between corporate financial performance and corporate social responsibility. Journal of Business Research, 157, 113553.
Saunders, M., Lewis, P., & Thornhill, A. (2009). Research methods for business students. Pearson Education.
Tien, C., Chen, C. N., & Chuang, C. M. (2013). A study of CEO power, pay structure, and firm performance. Journal of Management & Organization, 19(4), 424-453.
Ujunwa, A. (2012). Board characteristics and the financial performance of Nigerian quoted firms. Corporate Governance: The International Journal of Business in Society, 12(5), 656-674.
Zhou, Z., Zheng, F., Lin, J., & Zhou, N. (2021). The interplay among green brand knowledge, expected eudaimonic well-being and environmental consciousness on green brand purchase intention. Corporate Social Responsibility and Environmental Management, 28(2), 630-639.
Downloads
Published
Issue
Section
License
Copyright (c) 2024 Maria Magano Nashilyo, Timothy Masuni Nagriwum, Anita Nti-Kwakye
This work is licensed under a Creative Commons Attribution 4.0 International License.
