CEO Duality and Corporate Social Performance: The Moderating Role of CEO Regulatory Focus

초록

Empirical evidence regarding the impacts of CEO duality on organizational outcomes is very limited. An extensive body of research that examined CEO duality and firm financial performance relationship produced only mixed results. We extend this area of inquiry by examining CEO duality-corporate social performance (CSP) relationship while focusing on CEO regulatory focus as the moderators. CSP is an important indicator of sustainable management and regarded as a vital part of sustainable development of corporations. Drawing from agency theory, dual leadership theory, and regulatory focus theory, we hypothesize that firms with CEO duality demonstrate lower levels of CSP, while the negative impacts of CEO duality on CSP will be moderated by CEO’s regulatory focus. Specifically, the level of promotion focus of CEO-chairperson attenuates the negative relationship between CEO duality and CSP while such relationship will be strengthened by the level of CEO-chairperson’s prevention focus. Using a sample of large 167 U.S. firms from 2006 to 2011 with their KLD ratings, we found strong support for two of our three hypotheses. Our findings suggest that firms interested in enhanced corporate social performance might consider splitting the titles of the CEO and the chairperson of the board. Also, we find that promotion focused CEOs are more willing to engage in CSR practices even when they hold both CEO and chairperson titles. Based on the results, theoretical and practical implications of the study are discussed.

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