Are Powerful CEOs Green: Evidence from Corporate Social Responsibility Indicators

Author: Joan Wiggenhorn
Associate Professor of Finance
Nathan M. Bisk College of Business
Florida Institute of Technology

Presented at International Academy of Business and Economics, Las Vegas, NV (October, 2013)

This paper investigates the relationship between powerful CEOs and the environment. Using KLD (Kinder, Lydenberg, Domini and Co.) statistics regarding both strengths and concerns about the environment, I test how powerful CEOS as measured by CEO pay disparity compared with top management and duality affect the environment. The OLS regression results are mixed. Duality has a positive effect on overall Environment Strengths and beneficial products. Powerful CEOs, as measured by pay disparity, positively affect management systems and voluntary programs but have a negative effect on clean energy. Regarding Environmental Concerns, both duality and pay disparity negatively impacts hazardous waste and ozone depleting chemicals. However, powerful CEOs, as measured by pay disparity, positively affect climate change.

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