Can Socially Responsible CEOs Find Better Jobs?

A large stream of literature in economics, finance, and accounting suggests that managers’ decisions are influenced by their labor market prospects. Absent perfect information about managers’ ability, the labor market often takes a firm’s current and past performance as a signal of the quality of its CEO. While prior research has primarily focused on financial performance as a measure of corporate performance, recent studies show that various stakeholders have been increasingly focusing on social performance as a performance metric. For example, some asset managers incorporate environmental, social, and governance concerns into their investing decisions. We extend the literature by examining … Read more