|
Authors Ting-Yu Lin & Yu-Pei Zhang Pages 221–239 Keywords CEO power, ESG ratings |
How to Cite Lin, T.-Y. & Zhang, Y.-P. (2025). The impact of CEO power on environmental, social, and corporate governance (ESG) ratings. Management Review, 44(1), 221–239. https://doi.org/10.6656/MR.202501_44(1).ENG004
|
Abstract
Purpose – The purpose of this study is to examine the effects of CEO structural power, CEO ownership power, CEO expert power, and CEO prestige power on corporate ESG ratings.
Design/methodology/approach – This study employs Ordinary Least Squares (OLS) and Ordered Probit models for empirical analysis, followed by eight robustness and supplementary tests to ensure the rigor and reliability of the findings.
Findings – The empirical results show that CEO ownership power, CEO expertise power, and CEO reputation power are significantly positively correlated with ESG ratings. Conversely, CEO structural power is significantly negatively correlated with ESG ratings.
Research limitations/implications – This study is limited by the ESG rating data, covering only 2015 to 2020, restricting long-term trend analysis. Future research should extend the timeframe and incorporate cross-national data for broader applicability.
Practical implications/Social implications – The study’s findings confirm that CEO power influences a company's ESG rating performance, corroborating agency theory, the convergence of interests hypothesis, managerial flexibility theory, and upper echelons theory.
Originality/value – The results of this study offer valuable insights for companies to make decisions to enhance their ESG ratings and serve as a reference for regulatory authorities to strengthen corporate governance in the future.