IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v18y2025i11p609-d1782826.html
   My bibliography  Save this article

The Influence of Managerial Risk-Taking and Corporate Leadership on Firm Sustainability

Author

Listed:
  • Steve Swidler

    (Department of Economics, Lafayette College, Easton, PA 18042, USA)

Abstract

This study examines whether CEO risk tolerance influences a firm’s sustainable practices, as measured by Environmental, Social, and Governance (ESG) scores. The analysis uses facial width–height ratio (fWHR) as a proxy for CEO testosterone and risk-taking behavior. A regression analysis of S&P 500 firms from 2018 to 2022 shows that a greater fWHR is negatively associated with ESG scores, although the economic effect is small. A one standard deviation increase in fWHR decreases ESG by half a point on a 100-point scale. Further investigation into CEO turnover reveals a surprising asymmetry: when a new CEO has a higher fWHR, ESG scores increase significantly compared to firms without a CEO change. This finding, along with other confounding effects, suggests that a certain amount of calculated, strategic risk-taking may be necessary to successfully promote corporate sustainability programs.

Suggested Citation

  • Steve Swidler, 2025. "The Influence of Managerial Risk-Taking and Corporate Leadership on Firm Sustainability," JRFM, MDPI, vol. 18(11), pages 1-20, October.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:11:p:609-:d:1782826
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/18/11/609/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/18/11/609/
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:gam:jjrfmx:v:18:y:2025:i:11:p:609-:d:1782826. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.