CEO Contract Length and Contract Renewal: Impression Management of CSR Engagement
Prof. Jamie Yixing TONG
Distinguished Professor in Accounting, Shanghai University
Date: 8 April 2024 (Monday)
Time: 10:30 am to 12:00 pm
Venue: E22-G008
Host: Prof. Feng TANG, Assistant Professor in Accounting
Abstract
We examine the implications of chief executive officer (CEO) contract length for corporate social responsibility (CSR). We posit that, faced with greater time pressure to demonstrate their abilities, CEOs with shorter initial contract lengths are more likely than other CEOs to engage with impression management by making CSR efforts to impress their boards of directors. While CSR engagement generally enhances the probability of the CEO’s contract renewal, this effect is particularly strong for CEOs with shorter contracts. Nevertheless, firms with less busy boards are less likely than firms with busy boards to renew CEO contracts based on CSR efforts. Using a sample of U.S. firms with new CEO appointments between 1990 and 2017, we provide empirical evidence to support our theory and hypotheses. Our results are robust to a series of additional analyses, including using the U.K.’s Corporate Governance Code reform as an exogenous shock to address potential endogeneity issues. We discuss our contribution to the CEO employment contract, CSR and corporate governance literature.
Speaker
Prof. Jamie Yixing TONG is a distinguished professor of accounting at Shanghai University and an honorary senior research fellow at University of Queensland. Before joining Shanghai University, Prof. TONG earned tenure at University of Queensland and University of Western Australia. Prof. TONG’s research focuses on a few interrelated areas in capital market research, in accounting and corporate finance, corporate governance, intangible investments (R&D, CSR, corporate philanthropy etc.), accounting information and top executive characteristics. Her research on these topics has led to about 30 high quality publications including Journal of Financial and Quantitative Analysis (FT Top 50 Journal List), Academy of Management Journal (UTD Top 24 Journal List), Production and Operations Management (UTD Top 24 Journal List), Journal of Corporate Finance, Journal of Business Ethics, among others. Prof. TONG has secured various grants in Australia, China, and Hong Kong. She also received several Best Paper Awards in prestigious conferences. Prof. TONG is the associate editor of Asia-Pacific Journal of Accounting Economics (SSCI) and the editorial board member of Management and Organization Review (SSCI). Prof . TONG has been teaching financial accounting and financial statement analysis. She is also invited to deliver teaching for EMBA courses at the PBC School of Finance, Tsinghua University.
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