Abstract
This paper explores the role of environment, social, and governance (ESG) disclosures on the risk-taking of firms. The paper further investigates whether various dimensions of CEO power and CEO gender could explain the ESG risk-taking relationship. Using a sample of Fortune 500 firms from 2003 to 2020, our results are threefold. First our results show that firms’ ESG disclosures positively affect risk-taking. Second, the results suggest that the positive relationship between ESG disclosures and risk-taking is more pronounced in the presence of CEO formal power. Third, we find that this risk-taking incentive weakens in the presence of CEO informal power and in the case of female CEOs. We control for endogeneity concerns and the results are robust when alternative measures are used for risk and ESG.
| Original language | English |
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| Publication status | Published - 5 Sept 2023 |
| Event | British Accounting and Finance Association(BAFA) Northern Area Group(NAG) Annual Conference - University of Liverpool, Liverpool, United Kingdom Duration: 4 Sept 2023 → 5 Sept 2023 |
Conference
| Conference | British Accounting and Finance Association(BAFA) Northern Area Group(NAG) Annual Conference |
|---|---|
| Country/Territory | United Kingdom |
| City | Liverpool |
| Period | 4/09/23 → 5/09/23 |
Keywords
- ESG
- Risk-Taking
- CEO Power
- CEO Gender