Affiliation:
1. Hong Kong Polytechnic University, Hung Hom, Hong Kong;
2. Nanjing University of Science and Technology, Nanjing, Jiangsu 210094, China;
3. INSEAD, Singapore 138676
Abstract
Chief executive officers (CEOs) are expected to guard their firms against corporate social irresponsibility (CSIR) incidents. In this study, we hypothesize that CEO humility relates negatively to CSIR occurrence and positively to correction because of CEO preferences for protecting stakeholder interests and employing systematic information processing. These associations are stronger in industries with a high number of CSIR incidents and when top management teams have a higher ratio of gender and racial minorities. We develop and validate a new unobtrusive measure of CEO humility by using automated, objective behavioral indicators derived from earnings conference call transcripts. Our arguments and hypotheses are mostly supported by a sample of 197 Fortune 500 firms, 275 CEOs, and 1,243 firm-year observations from 2002 to 2015. Our study contributes to a more complete understanding of CEOs’ role in CSIR prevention and correction, widens the scope of CEO humility research by including stakeholder-centered firm outcomes, and mitigates measurement constraints in understanding CEO humility-firm action relationships. Funding: This work was supported by Hong Kong Polytechnic University [Grant P0030113] and the National Science Foundation of China [Grants 71602086, 71632005, 72372068, and 72072088], and INSEAD [Ian Potter (‘93D) PhD Award]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.17104 .
Publisher
Institute for Operations Research and the Management Sciences (INFORMS)