ESG and CEO Turnover

63 Pages Posted: 14 Oct 2020

See all articles by Gonul Colak

Gonul Colak

Hanken School of Economics

Timo Korkeamaki

Aalto University - Aalto University School of Business, Department of Finance, Students

Niclas Oskar Meyer

Hanken School of Economics

Date Written: October 13, 2020

Abstract

We investigate corporate reactions to problems related to Environmental, Social, and Governance (ESG) issues by observing the connection between negative media attention to these issues and CEO turnover. We use a sample of large US and European firms, which allows us to consider covariates not only at individual-, firm-, and industry levels, but also at the country level. We find that ESG-related negative news has a robust and significant impact on CEO replacement odds, and this impact is proportional to the severity of an event. Also, CEO turnover probability is inversely proportional to the stock market reaction to an ESG incident in both common-law and civil-law countries, however, the negative media attention on itself ("shaming") can trigger CEO turnover only on latter group of countries.

Suggested Citation

Colak, Gonul and Korkeamaki, Timo and Meyer, Niclas Oskar, ESG and CEO Turnover (October 13, 2020). Proceedings of Paris December 2020 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: https://ssrn.com/abstract=3710538 or http://dx.doi.org/10.2139/ssrn.3710538

Gonul Colak

Hanken School of Economics ( email )

P.O. Box 479
FI-00101 Helsinki, 00101
Finland

Timo Korkeamaki

Aalto University - Aalto University School of Business, Department of Finance, Students ( email )

Finland

Niclas Oskar Meyer (Contact Author)

Hanken School of Economics ( email )

PB 479
Arkadiagatan 22
Helsinki, Uusimaa 00100
Finland
+358407573658 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
234
Abstract Views
1,150
rank
161,002
PlumX Metrics