IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v134y2021icp233-251.html
   My bibliography  Save this article

Choices in CDO appointment and firm performance: Moving towards a Stakeholder-based approach

Author

Listed:
  • Mehta, Nikhil
  • Mehta, Anju
  • Hassan, Yusuf
  • Buttner, Holly
  • RoyChowdhury, Sanchita

Abstract

The choices associated with a chief diversity officer (CDO) appointment can significantly impact firm performance. However, research examining this link is scarce. To bridge this gap, we draw uponstakeholder,upper echelons,and institutional theoriesto examine howchoices related to CDO appointments, namely, gender, type of hire, and type of position, impact firm performance. Using data from Fortune 1000 and S&P 500 U.S. firms on 101 CDO appointments,we investigate howCDO appointment choicesinfluence firm performance. Our results indicate that appointment of a female CDO is not associated with a significantly better firm performance than hiring a male CDO. However, consistent with our hypotheses, we found evidence that both - the type of CDO position and the type of hire are important to firm performance. Notably, a firm's performance gains are substantially increased when the firm hires a CDO externally to fill a newly created CDO position.

Suggested Citation

  • Mehta, Nikhil & Mehta, Anju & Hassan, Yusuf & Buttner, Holly & RoyChowdhury, Sanchita, 2021. "Choices in CDO appointment and firm performance: Moving towards a Stakeholder-based approach," Journal of Business Research, Elsevier, vol. 134(C), pages 233-251.
    • Handle: RePEc:eee:jbrese:v:134:y:2021:i:c:p:233-251
    DOI: 10.1016/j.jbusres.2021.05.016
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296321003453
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2021.05.016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hans Dijk & Marloes Engen & Jaap Paauwe, 2012. "Reframing the Business Case for Diversity: A Values and Virtues Perspective," Journal of Business Ethics, Springer, vol. 111(1), pages 73-84, November.
    2. Dadanlar, Hazel H. & Abebe, Michael A., 2020. "Female CEO leadership and the likelihood of corporate diversity misconduct: Evidence from S&P 500 firms," Journal of Business Research, Elsevier, vol. 118(C), pages 398-405.
    3. Kevin Campbell & Antonio Mínguez-Vera, 2008. "Gender Diversity in the Boardroom and Firm Financial Performance," Journal of Business Ethics, Springer, vol. 83(3), pages 435-451, December.
    4. Carroll, Archie B., 1991. "The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders," Business Horizons, Elsevier, vol. 34(4), pages 39-48.
    5. Agle, Bradley R. & Donaldson, Thomas & Freeman, R. Edward & Jensen, Michael C. & Mitchell, Ronald K. & Wood, Donna J., 2008. "Dialogue: Toward Superior Stakeholder Theory," Business Ethics Quarterly, Cambridge University Press, vol. 18(2), pages 153-190, April.
    6. Johnson, Stefanie K. & Murphy, Susan Elaine & Zewdie, Selamawit & Reichard, Rebecca J., 2008. "The strong, sensitive type: Effects of gender stereotypes and leadership prototypes on the evaluation of male and female leaders," Organizational Behavior and Human Decision Processes, Elsevier, vol. 106(1), pages 39-60, May.
    7. Gary F. Peters & Andrea M. Romi & Juan Manuel Sanchez, 2019. "The Influence of Corporate Sustainability Officers on Performance," Journal of Business Ethics, Springer, vol. 159(4), pages 1065-1087, November.
    8. Ye Cai & Hoje Jo & Carrie Pan, 2012. "Doing Well While Doing Bad? CSR in Controversial Industry Sectors," Journal of Business Ethics, Springer, vol. 108(4), pages 467-480, July.
    9. Luu, Trong Tuan & Rowley, Chris & Vo, Thanh Thao, 2019. "Addressing employee diversity to foster their work engagement," Journal of Business Research, Elsevier, vol. 95(C), pages 303-315.
    10. Tanja Rabl & María Carmen Triana & Seo-Young Byun & Laura Bosch, 2020. "Diversity Management Efforts as an Ethical Responsibility: How Employees’ Perceptions of an Organizational Integration and Learning Approach to Diversity Affect Employee Behavior," Journal of Business Ethics, Springer, vol. 161(3), pages 531-550, January.
    11. Ho, Joanne & Plewa, Carolin & Lu, Vinh Nhat, 2016. "Examining strategic orientation complementarity using multiple regression analysis and fuzzy set QCA," Journal of Business Research, Elsevier, vol. 69(6), pages 2199-2205.
    12. Adomako, Samuel, 2021. "Resource-induced coping heuristics and entrepreneurial orientation in dynamic environments," Journal of Business Research, Elsevier, vol. 122(C), pages 477-487.
    13. James Cordeiro & Manish Tewari, 2015. "Firm Characteristics, Industry Context, and Investor Reactions to Environmental CSR: A Stakeholder Theory Approach," Journal of Business Ethics, Springer, vol. 130(4), pages 833-849, September.
    14. Pascual Berrone & Jordi Surroca & Josep Tribó, 2007. "Corporate Ethical Identity as a Determinant of Firm Performance: A Test of the Mediating Role of Stakeholder Satisfaction," Journal of Business Ethics, Springer, vol. 76(1), pages 35-53, November.
    15. Kamal Fatehi & Jeongho Choi, 2019. "International Business Management," Springer Texts in Business and Economics, Springer, edition 2, number 978-3-319-96622-9, August.
    16. Cristian L. Dezsö & David Gaddis Ross, 2012. "Does female representation in top management improve firm performance? A panel data investigation," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1072-1089, September.
    17. Frank Wiengarten & Chris K. Y. Lo & Jessie Y. K. Lam, 2017. "“How does Sustainability Leadership Affect Firm Performance? The Choices Associated with Appointing a Chief Officer of Corporate Social Responsibility”," Journal of Business Ethics, Springer, vol. 140(3), pages 477-493, February.
    18. Maria Guadalupe & Hongyi Li & Julie Wulf, 2014. "Who Lives in the C-Suite? Organizational Structure and the Division of Labor in Top Management," Management Science, INFORMS, vol. 60(4), pages 824-844, April.
    19. Perryman, Alexa A. & Fernando, Guy D. & Tripathy, Arindam, 2016. "Do gender differences persist? An examination of gender diversity on firm performance, risk, and executive compensation," Journal of Business Research, Elsevier, vol. 69(2), pages 579-586.
    20. Baixauli-Soler, J. Samuel & Sanchez-Marin, Gregorio, 2011. "Organizational governance and TMT pay level adjustment," Journal of Business Research, Elsevier, vol. 64(8), pages 862-870, August.
    21. Kristina Reineke & Holger Steinmetz & Rodrigo Isidor & Rüdiger Kabst, 2020. "Women on Top Management Teams and Firm Performance in German Medium-Sized Enterprises: The Moderating Role of Recruiting Source," Working Papers Dissertations 60, Paderborn University, Faculty of Business Administration and Economics.
    22. Chris Mason & John Simmons, 2014. "Embedding Corporate Social Responsibility in Corporate Governance: A Stakeholder Systems Approach," Journal of Business Ethics, Springer, vol. 119(1), pages 77-86, January.
    23. Brooklyn Cole & Manjula Salimath, 2013. "Diversity Identity Management: An Organizational Perspective," Journal of Business Ethics, Springer, vol. 116(1), pages 151-161, August.
    24. E. Holly Buttner & Kevin B. Lowe, 2017. "Addressing Internal Stakeholders’ Concerns: The Interactive Effect of Perceived Pay Equity and Diversity Climate on Turnover Intentions," Journal of Business Ethics, Springer, vol. 143(3), pages 621-633, July.
    25. Peggy M. Lee & Erika Hayes James, 2007. "She'‐e‐os: gender effects and investor reactions to the announcements of top executive appointments," Strategic Management Journal, Wiley Blackwell, vol. 28(3), pages 227-241, March.
    26. Conyon, Martin J. & He, Lerong, 2017. "Firm performance and boardroom gender diversity: A quantile regression approach," Journal of Business Research, Elsevier, vol. 79(C), pages 198-211.
    27. Siebold, Nicole, 2021. "Reference points for business model innovation in social purpose organizations: A stakeholder perspective," Journal of Business Research, Elsevier, vol. 125(C), pages 710-719.
    28. Kamal Fatehi & Jeongho Choi, 2019. "The Management of International Business," Springer Texts in Business and Economics, in: International Business Management, edition 2, chapter 1, pages 3-35, Springer.
    29. Sharma, Amalesh & Moses, Aditya Christopher & Borah, Sourav Bikash & Adhikary, Anirban, 2020. "Investigating the impact of workforce racial diversity on the organizational corporate social responsibility performance: An institutional logics perspective," Journal of Business Research, Elsevier, vol. 107(C), pages 138-152.
    30. Fernando, Guy D. & Jain, Shalini Sarin & Tripathy, Arindam, 2020. "This cloud has a silver lining: Gender diversity, managerial ability, and firm performance," Journal of Business Research, Elsevier, vol. 117(C), pages 484-496.
    31. Khan, Walayet A. & Vieito, João Paulo, 2013. "Ceo gender and firm performance," Journal of Economics and Business, Elsevier, vol. 67(C), pages 55-66.
    32. Deepak K. Datta & James P. Guthrie, 1994. "Executive succession: Organizational antecedents of ceo characteristics," Strategic Management Journal, Wiley Blackwell, vol. 15(7), pages 569-577, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kubo, Katsuyuki & Nguyen, Thanh Thi Phuong, 2021. "Female CEOs on Japanese corporate boards and firm performance," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).
    2. Sanjukta Brahma & Chioma Nwafor & Agyenim Boateng, 2021. "Board gender diversity and firm performance: The UK evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5704-5719, October.
    3. Aruoriwo Marian Chijoke-Mgbame & Agyenim Boateng & Chijoke Oscar Mgbame, 2020. "Board gender diversity, audit committee and financial performance: evidence from Nigeria," Accounting Forum, Taylor & Francis Journals, vol. 44(3), pages 262-286, July.
    4. Tsou, Meng-Wen & Yang, Chih-Hai, 2019. "Does gender structure affect firm productivity? Evidence from China," China Economic Review, Elsevier, vol. 55(C), pages 19-36.
    5. Rovelli, Paola, 2020. ""I am stuck in meetings": Understanding the relation of CEO time management with TMT size and gender diversity," European Management Journal, Elsevier, vol. 38(5), pages 777-790.
    6. Frank Wiengarten & Chris K. Y. Lo & Jessie Y. K. Lam, 2017. "“How does Sustainability Leadership Affect Firm Performance? The Choices Associated with Appointing a Chief Officer of Corporate Social Responsibility”," Journal of Business Ethics, Springer, vol. 140(3), pages 477-493, February.
    7. Syed Shafqat Mukarram & Abubakr Saeed & Shawkat Hammoudeh & Muhammad Mustafa Raziq, 2018. "Women on Indian boards and market performance: a role-congruity theory perspective," Asian Business & Management, Palgrave Macmillan, vol. 17(1), pages 4-36, February.
    8. Maurizio La Rocca & Francesco Fasano & Tiziana La Rocca & Neha Neha, 2024. "Women in CEO duality and firm performance in Europe," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(1), pages 177-214, March.
    9. Allison, Lee & Liu, Yu & Murtinu, Samuele & Wei, Zuobao, 2023. "Gender and firm performance around the world: The roles of finance, technology and labor," Journal of Business Research, Elsevier, vol. 154(C).
    10. Kent Baker, H. & Pandey, Nitesh & Kumar, Satish & Haldar, Arunima, 2020. "A bibliometric analysis of board diversity: Current status, development, and future research directions," Journal of Business Research, Elsevier, vol. 108(C), pages 232-246.
    11. Dah, Mustafa A. & Jizi, Mohammad I. & Kebbe, Reem, 2020. "CEO gender and managerial entrenchment," Research in International Business and Finance, Elsevier, vol. 54(C).
    12. Farzan Yahya & Ghulam Abbas & Ammar Ahmed & Muhammad Sadiq Hashmi, 2020. "Restrictive and Supportive Mechanisms for Female Directors’ Risk-Averse Behavior: Evidence From South Asian Health Care Industry," SAGE Open, , vol. 10(4), pages 21582440209, October.
    13. Sah, Nilesh B. & Adhikari, Hari P. & Krolikowski, Marcin W. & Malm, James & Nguyen, Thanh T., 2022. "CEO gender and risk aversion: Further evidence using the composition of firm’s cash," Journal of Behavioral and Experimental Finance, Elsevier, vol. 33(C).
    14. Shakil, Mohammad Hassan, 2021. "Environmental, social and governance performance and financial risk: Moderating role of ESG controversies and board gender diversity," Resources Policy, Elsevier, vol. 72(C).
    15. Christopher Kurzhals & Lorenz Graf‐Vlachy & Andreas König, 2020. "Strategic leadership and technological innovation: A comprehensive review and research agenda," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 437-464, November.
    16. Paola Belingheri & Filippo Chiarello & Andrea Fronzetti Colladon & Paola Rovelli, 2021. "Twenty years of gender equality research: A scoping review based on a new semantic indicatorr," PLOS ONE, Public Library of Science, vol. 16(9), pages 1-27, September.
    17. Ahmed Bouteska & Mehdi Mili, 2022. "Women’s leadership impact on risks and financial performance in banking: evidence from the Southeast Asian Countries," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(4), pages 1213-1244, December.
    18. Jain, Shalini Sarin & Fernando, Guy D. & Tripathy, Arindam & Bhatia, Sandhya, 2021. "Closing the gender gap in top management teams: An examination of diversity and compensation parity in family and non-family firms," Journal of Family Business Strategy, Elsevier, vol. 12(4).
    19. Ioannis Tampakoudis & Andreas Andrikopoulos & Michail Nerantzidis & Nikolaos Kiosses, 2022. "Does boardroom gender diversity affect shareholder wealth? Evidence from bank mergers and acquisitions," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3315-3344, July.
    20. Kristina Reineke & Holger Steinmetz & Rodrigo Isidor & Rüdiger Kabst, 2020. "Women on Top Management Teams and Firm Performance in German Medium-Sized Enterprises: The Moderating Role of Recruiting Source," Working Papers Dissertations 60, Paderborn University, Faculty of Business Administration and Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:134:y:2021:i:c:p:233-251. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.