A CEO is responsible not only for driving the top managerial decisions within an organization but also for the reputation and impact that organization has within the world. A CEO is always the reflection of their company, but the opposite is also true with the company being a reflection of their CEO. This begs the question of exactly how CEOs impact their firms. Many studies have been conducted with regard to this, however, mostly through a financial and profitability perspective. Stevens School of Business professor, Dr. Sibel Ozgen Novelli, felt that it was important to look at organizational impact through a different lens. This is what led to the study of CEO characteristics and social impact of their organizations.
The Stute had the opportunity to interview Dr. Ozgen regarding this research. Dr. Ozgen holds two PhDs, one from Florida International University in Miami and the other from Universidad Rovira I Virgili in Tarragona, Spain. At Stevens, she teaches courses on strategy, organizational behavior, and leadership development. She is also involved in the First-Year Experience course for first-year undergraduate students. The majority of her research centers around leadership, as shown in her study titled “CEO Characteristics and Corporate Social Responsibility and Irresponsibility: Mirrored or Distinct Correlates?” This article, a collaboration between Dr. Ozgen, Dr. Dasol Sim of Saint Louis University, Dr. Nathan Hiller of Florida International University, Dr. Yuyang Zhou of Bentley University, and Dr. Ronaldo Parente of Florida International University, was recently published in the academic journal Corporate Governance: An International Review.
This paper looks into two key questions:
- Do CEO traits influence a company’s Corporate Social Responsibility (CSR) (positive actions such as philanthropy, environmental sustainability) and Corporate Social Irresponsibility (CSI) (negative actions such as fraud, environmental damage, scandals)?
- Are CSR and CSI mirror opposites, or are they distinct constructs that can coexist?
In order to answer these questions, the researchers performed a meta-analysis looking into 420 studies and 425 independent samples. Data was collected from hundreds of papers, and correlations were examined between a specific CEO trait and CSR and CSI outcomes of firms. In terms of findings, the researchers concluded that CSR and CSI are not exact mirrors, meaning it is possible for a company to engage in both positive and negative behavior at once. In terms of values, the study linked traits such as political liberalism, religiosity, civic engagement, and ethical/transformational leadership styles to higher CSR and liberalism and female CEOs to lower CSI. A CEO’s educational background, such as completing an MBA or attending elite institutions, displayed a positive correlation with CSR but no correlation with CSI. The most interesting find was that narcissism, a trait that has clear negative connotations, has a positive correlation with both CSI and CSR.
In terms of the implications of this research, there are many. For boards and investors selecting someone for the position of a CEO, it is important to understand traits and how they can be double-edged. For students and those who aspire to be leaders, this showcases that leadership traits are nuanced. From a societal point of view, this study highlights that CSR and CSI aren’t as black and white as they seem, and firms need to be more aware and accountable for their actions. When asked about how the ever-changing nature of today’s world influences the CEO’s actions on a company’s social impact, Dr. Ozgen shared that “institutional differences are important to consider,” and that “relationships may change” depending on the context.
When asked to share any concluding remarks on this work, Dr. Ozgen expressed gratitude for being able to work with two undergraduate students, Ethan Barnes and Parker Adkins, who are acknowledged in the manuscript of the article.
