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CEO Tenure, Corporate Social Performance, and Corporate Governance: A Korean Study

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  • Jun Hyeok Choi

    (Department of Accounting, Jeonbuk National University, Jeonju-si 54896, Korea)

  • Saerona Kim

    (Department of Accounting, Gyeongsang National University, Jinju City 52828, Korea)

  • Ayoung Lee

    (Department of Accounting, Kangwon National University, Chuncheon-si 24341, Korea)

Abstract

The purpose of this study was to examine the association between Chief Executive Officer (CEO) tenure and corporate social performance with the moderating effect of governance. We investigated whether new CEOs and CEOs in their last year of service were more focused on short-termism than CEOs of other periods. Specifically, we tested whether these CEOs reduced social performance that demands immediate expenditure and expect payoffs in the long run. We also tested whether good governance can mitigate such behaviors, because not all CEOs of the same tenure will act the same, depending on the monitoring environments surrounding them. We employed ordinary least squares (OLS) method and the moderator models using data from the Korean listed companies from 2012 to 2016. Test results showed that only the CEOs of their last year reduced social performance. However, when we considered corporate governance, we found that both groups of CEOs reduced social performance, and that good governance mitigated the adverse effects of the two periods on Corporate Social Responsibility (CSR). Specifically, we tested board independence, board frequency, CEO duality, and board diversity, and found that, for all but board independence, the negative effects of the two periods on social performance were decreased.

Suggested Citation

  • Jun Hyeok Choi & Saerona Kim & Ayoung Lee, 2019. "CEO Tenure, Corporate Social Performance, and Corporate Governance: A Korean Study," Sustainability, MDPI, vol. 12(1), pages 1-17, December.
    • Handle: RePEc:gam:jsusta:v:12:y:2019:i:1:p:99-:d:300659
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    1. Wafa Ghardallou, 2022. "Corporate Sustainability and Firm Performance: The Moderating Role of CEO Education and Tenure," Sustainability, MDPI, vol. 14(6), pages 1-16, March.
    2. Melinda Cahyaning Ratri & Iman Harymawan & Khairul Anuar Kamarudin, 2021. "Busyness, Tenure, Meeting Frequency of the CEOs, and Corporate Social Responsibility Disclosure," Sustainability, MDPI, vol. 13(10), pages 1-22, May.

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