CEO personality AND CSR 

                      Author: LAAMOUD ZAKARIAE

                      Country: Morocco

                      City: Meknes

                      Date: 2022

Abstract

This paper intends to break down whether (CEO) motivators and characteristics (for example CEO power, CEO residency) are connected with corporate social responsibility (CSR) as well as the other way around. While most of the included examinations dissected the CEO-CSR link, there are markers for a bidirectional relationship. In addition, earlier examination has zeroed in on CEO incentives, particularly remuneration contracts, and on the US capital market. A significant examination hole connects with CEO characteristics, for example CEO values, education and experience. Heterogeneous CEO and CSR variables and endogeneity concerns bring down the legitimacy of recent studies. Future research is urged to carry out unique relapse models, increment CSR and CEO intermediaries and spotlight on global examples with country-specific impacts. The paper is the principal writing survey on the communication among CEO and CSR up to this point.

Keywords: CEO, CSR, renewal

1. Introduction

Corporate Social Responsibility (CSR) is not a zero sum game between business and society. Going beyond consistence and making shared esteem are urgent to any organization’s CSR technique. Compelling execution of CSR system permits firms to catch maintainable upper hand. The investor viewpoint accepts that the motivation behind the firm is to augment investor esteem. Thusly, many examinations have been directed to look at the linkage between corporate monetary execution and CSR drives to correct worries according to the investor viewpoint. Albeit the outcomes among CFP and CSR drives have been blended large companies like Wal-Mart, Nike, and Starbucks, have begun to coordinate CSR rehearses into their corporate technique as a reaction to partner interest. To be sure, while the talk of CSR has been progressed from ‘whether’ to ‘what’ and ‘how’, organizations have displayed various methodologies toward CSR. Firms vary in their CSR execution as well as in term of consistency. Consistency is characterized by Oxford Dictionaries as ‘the nature of accomplishing a degree of execution which doesn’t change incredibly in quality over the long run’. CSR execution in this study is characterized as ‘a company’s reliable appearance in CSR positioning’. CSR is more recognizable when firms become flighty. In this way acting in a predictable premise is a pivotal variable. Scalet and Kelly (2010) analyzed the evaluations of 137 firms recorded in Innovest Global and CRO magazines somewhere in the range of 2007 and 2008; they observed 37 firms had been dropped from the rundown. These organizations, much of the time, had confronted adverse occasions that hastened their expulsion from the rankings. The outcomes show that only one out of every odd firm performs at a steady level. Varieties among organizations’ CSR execution can be credited to different causes, going from contrasts in applicable foundations to CFP. In any circumstance, supervisors are generally liable for and are key to CSR drives. Be that as it may, studies play overlooked the part of corporate innovators in figuring out and executing CSR approaches. There is an absence of examination concerning applicable administrative factors influencing CSR execution. This review is an endeavor to make up for this writing shortcoming by investigating the association between corporate chiefs’ ascribes also consistency in CSR execution by posing the accompanying inquiry: Which CEO demographical ascribes influence CSR execution.

A new survey of the writing in corporate social responsibility by Aguinis and Glavas (2012) uncovers the various applied and experimental investigations looking at what instigates an association to take part in corporate social responsibility (CSR). The significance of this peculiarity is highlighted with most of grant in this field showing up inside the last 15 years. Various examinations have analyzed the precursors of firms taking part in CSR from points of view including corporate governance, impression management, arrangement of organizational values and mission with CSR issues, and from an essential ramifications point of view. There anyway exist not many examinations which explore the intentions in participating in corporate social responsibility according to the viewpoint of an organization’s top management team (TMT) and specifically, the CEO. Given the general notability and significance of the top manager inside the organization, further exploration analysing how the top manager’s character and value system impacts CSR commitment through leadership stays a neglected area of higher classes research. Further clarifying this idea, one approach to researching the precursors of why a top manager takes part in CSR can be clarified through higher classes hypothesis which fights that strategic decisions made inside the organization are an impression of the values, cognitive style, personality, and experiences of top chiefs. Recent investigations have fused the more elite classes point of view to clarify CSR inception by researching leadership style  as well as the demographic background (for example formal education) of the CEO. Few examinations in any case, have researched CSR commitment according to the point of view of the singular qualities and character of hierarchical individuals with much less researching the character construction of an organization’s leadership constellation. Accordingly, research explicitly exploring chief character and CSR commitment can offer a superior comprehension of why firms settle on these choices.

2. Literature review
   1. CEO’s characteristics and firm value

• CEO’s characteristics

CSR is an essential choice that organizations take to increment firm worth; accordingly it reflects different attributes of the manager(s) that attempt the decision. Past exploration on CEO characteristics has decided the center segment aspects that have the most obvious opportunity to foresee key independent direction. These are (1) nationality, (2) education, (3) age, (4) gender, and (5) tenure. CSR performance is contended to be affected by managerial values and convictions. Additionally, it has been contended that manager qualities altogether affect the perspective and discernment of environmental issues  as well as how the institutional environment encompassing the firm and its business is seen. Earlier examination inside the discipline of business ethics has predominantly centered on the instructive foundation of CEOs to foresee CSR performance as it influences the CEOs’ values and convictions. Then again, it can’t be featured an adequate number of that information on the educative background is significant but instead complicated as interrogating a scholastic title from one country to find its comparable from another can be challenging and subjective. Different examinations have researched whether a financial aspects degree contrasts from others concerning decision-making in moral predicaments. The outcomes have shown that economic students understudies answer in a more unscrupulous way when they are placed in the detainee’s situation after they have been shown the personal circumstance model, and are bound to show a noncooperative conduct towards others. Finkelstein, Cannella, Hambrick, and Cannella (2009) have added to the exploration region by finishing up a critical impact on firm results from the instructive background. Additionally, educational background has a solid positive effect on the degree to which a CEO is inventive. Additionally, there is upheld proof that CEOs with a MBA degree show better results as far as firm value, all things considered contended that such degree gives the singular better ability to exploit opportunities regard strategic decisions. The literature settles with the understanding that educational background, and explicitly MBA graduates, assumes a significant part to anticipate firm behaviour in view of CEO characteristics. It is essential to explain that the literature is recognizing a MBA degree and a MSc BA degree, as the former is an executive oriented education, in the meantime the last option is not. Due to the already profound research linking the instructive foundation of the CEO and opportunistic firm behaviour.

Hambrick (2007) places that the most ideal way to comprehend a specific company’s performance is to consider its fundamental dispositions and predispositions of the strong actors, who are the top executives. These assumptions depend on the higher classes’ hypothesis that was proposed by Hambrick and Mason (1984). That is what the hypothesis thinks; the attributes of managers can be valuable in anticipating the outcomes of the firm. The theory contends that the mental base and upsides of the executives influence the basis of their personalized understandings of the essential circumstances they face. It shows a person’s knowledge base, skills, values and the capacity to process data, which impacts the most common way of deciding (Hambrick, 2007).

There has been a growth of studies on managerial qualities subjects as found before decade. Shefrin (2001) demonstrated that managers’ sociological and physiological characteristics may affect different management decisions. A few investigations have shown that the characteristics of CEOs impact decision-making. For example, Byrnes et al. (1999) concentrated on the CEOs’ gender and risk-taking perspectives; Brown and Sarma (2007) investigated the CEO’s presumptuousness and corporate acquisitions; Barros and Da Silveira (2007) concentrated on the CEO founder and the utilization of influence; Bamber et al. (2010) researched the time of CEOs and deliberate decision of financial desclosure; Li et al. (2011) and Serfling (2012) concentrated on the period of CEOs and investment decisions; and Tomak (2013) inspected the CEO’s presumptuousness and capital structure decisions. Moreover, the CEOs have a significant measure of control on the detailed financial consequences of their organizations. A few experimental investigations have upheld these charges (Jiang et al., 2010; Bamber et al., 2010 and Demerjian et al., 2013), and those on CEO turnover (Kramarz and Thesmar, 2013) and corporate governance (Brown et al., 2012). Chime et al. (2015) inspected the effects of the individual characteristics of the CEOs on financial advantage.

Numerous characteristics of the CEOs have been recognized in the past studies, for example, education, gender, tenure, age, experience, background, expertise, shareholding and duality, that influence the CEO’s way of behaving (Bamber et al., 2010; Jiang et al., 2013). As of late, a few studies on CEOs’ characteristics have been carried, for example, on the CEO age and the measure of capital raised (Badru et al., 2017), the CEOs demographic characteristics (e.g., experience, age, education, professional experience and gender) on corporate risk-taking (Farag & Mallin, 2018) and the CEO power on corporate social responsibility disclosures (Muttakin et al., 2018). Taken together, this stream of research features how individual CEOs influence their firms and gives an inspiration to conducting studies in related areas.

• Firm value

It is accepted that the CEO impacts the decisions in the firm. This can furtherly affect firm value. Firm value will be depicted by the Tobin’s Q of the organization. This ratio assumes a significant part in numerous other financial interactions (Chung and Pruitt, 1994). Tobin’s Q is characterized as the proportion of market value to the replacement cost of the assets of a firm. How much more is a company worth on the stock market than the costs it will bear in the event that it decides to supplant all resources? Assuming the number is somewhere in the range of 0 and 1 it implies that the expenses to supplant all resources is higher than the market value. This implies that the stock is underestimated. Assuming it is more prominent than 1, it recommends that the stock is overvalued.

Nonetheless, it is difficult to be exact in the substitution expenses of the intangible resources, in this manner it does not mean the stock is overvalued as such. For instance, technological organizations would have generally lower replacement costs for their resources for their market value than company that are more reliant of industrial machines. The Tobin’s Q is calculated as the following:

Tobin’s Q = (Market capital + total liabilities)/ (common stock + total liabilities)

The connection between board ownership and Tobin’s Q is investigated by Morck, Schleifer, and Vishny (1988). They contended that rising board ownership is gainful for the Tobin’s Q assuming the board has no ownership yet. Already, the motivators of the board and shareholders were not adjusted. In any case, equity based ownership would give the board of directors incentives to build the firm value. This positive relationship stops once they acquired over 5% of ownership. Right now an expansion in ownership prompts a lower Tobin’s Q.

Reason is that right now higher ownership prompts more weaker governance structures. More and more various owners lead to additional conversations during the board meetings, which increments managerial issues. Nonetheless, when the board ownership passes 25%, the relationship is positive once more. In the end, the board acquired an ownership level where they are capable and willing to follow up for the benefit of themselves.

• Relation between CEO’s characteristics and firm value

A few exploration has been done about why and how CEO characteristics matter for an organization. In the first place, Datta and Guthrie (1994) observed that there is serious areas of strength for a between poor performance of a firm and determination of the CEO beyond the firm. Firms ought to search inside for a replacement prior to going to outer leaders. Besides, CEOs that have a more elevated level of education and a technical functional background are bound to have a more intensive research and development program. Thong and Yap (1995) settle on this view also, observed that small businesses are bound to take on information technology (IT) when the CEO has an innovative character, positive attitude towards adoption of IT, and has more prominent IT knowledge.

Other than the reception of IT and the power of research and development, the characters of a CEO have effect on the decision of foreign market entry mode. Herrmann and Datta (2002) found which characteristics favour full-control entry methodologies. First, the more extended the position residency, the higher the probability for a full-control entry. Besides, authenticity in their situation alongside more elevated levels of certainty and experience bring about full-control entry.

CEOs with throughput backgrounds ordinarily have longing for more noteworthy control and efficiency, accordingly favour full-control entry. Finally, global experience among replacement are significant elements for full-control entry.

Confidence of a CEO can likewise be viewed as a qualities that effects firm performance. Heaton (2002) found that optimistic CEOs exaggerate their own corporate projects furthermore, consequently put resources into negative net present value projects despite the fact that their point is to create gain. In addition, they accept that capital markets sectors underestimate their company’s dangerous protections.

Malmendier and Tate (2008) agree on this view and finished from their review that careless CEOs overpay in acquisitions and mergers, particularly assuming that they have the admittance to internal financing. Justification for this is that they misjudge their capacity to create returns during acquisitions and mergers. In this manner, they make a greater number of acquisitions and mergers than they ought to.

2. CEO characteristics and corporate investment

The literature on the connection between tenure of CEOs and corporate investment has been extensively divided with two groups. First group of studies contend that CEOs with shorter duration have lower power, lower level of work knowledge, lower knowledge about the organization than the older CEOs. Subsequently, the short-tenured CEOs invest less in riskier projects than the CEOs having longer tenure (Finkelstein and Hambrick, 1996; Hermalin and Weisbach, 1991; Mezghanni, 2010; Miller and Shamsie, 2001; Richard, Wu, and Chadwick, 2009). One more strand of literature states that short tenured CEOs invest more agressively over lengthy tenure CEOs. Likely, this is because of the way that the short-tenured CEOs are more open to innovations, change and experimentation, and powerful urge to pick short-term results to fabricate their standing in the organization. The current investigations likewise contend that more drawn out tenured CEOs are risk-loath and have less information on the evolving environment, which decreases their capacity to step up the firm’s investment when there are insucient internal assets (Finkelstein and Hambrick, 1996; Gibbons and Murphy, 1992; Graham, Harvey, and Puri, 2013; Hambrick, Geletkanycz, and Fredrickson, 1993; Hambrick and Mason, 1984; Hirshleifer, 1993; Miller, 1991; Miller and Shamsie, 2001). Following these contentions, the element of the effect of tenure on corporate investment is permitted to not entirely determined.

Existing examinations recognize that CEO’s education is reflected in their decision-making cycle (Becker, 1970; Dollinger, 1984; Gunz and Jalland, 1996; Schroder, Driver, and Struefert, 1967). Especially, CEOs having financial education foundation are supposed to be less influenced by unreasonable behavior as they forces better openness to financial market and comprehend the macroeconomic fundamentals (Ben Mohamed et al., 2014; Malmendier and Tate, 2005b). This large number of contemplations drove these CEOs to bring the external capital in a cost effective way, which assists with diminishing the normal expense of capital. Subsequently, we expect that financial education of CEO may influence investment choices and diminishes the investment cash flow awareness.

3. Drivers of CSR
   1. Internal influencing factors of CSR

• Organizational factors

Some SMEs have organizational characteristics allowing them to integrate the CSR more than others. A size effect is observed in the study of the CSR of SMEs (Berger Douce, 2008). Some authors defend the existence of a direct link between size and company commitment (Cabagnols and Le Bas, 2006; Imbs and Lalao, 2013; Perrini et al., 2007; Russo and Tencati, 2007). Imbs and Lalao (2013) explain that some arguments related to the size and the turnover can be evoked in the case of reluctance of certain SMEs to engage in CSR. PEs or VSEs seem to have fewer resources to allocate for social responsibility projects (Perez-Batres et al., 2012). Large SMEs importance would better perceive the benefits that a CSR approach can generate and integrate it into their strategic visions. On the other hand, other authors defend the idea that SMEs, by their nature, would be more sensitive to CSR through proximity which characterizes the relations they maintain with certain stakeholders (the population and local authorities) (Labelle and St-Pierre, 2015). These authors find no relationship between the size of the firm and its sensitivity to CSR.

The ownership structure is important in the integration of a CSR approach in SMEs. The sole ownership of the company generally held by the managing entrepreneurs, if they are sensitive to CSR, promotes the implementation of responsible practices at the within the organization. We thus recall the place occupied by the leader in decision-making, in particular the integration of CSR (Jenkins, 2004; Spence, 2007).

The lack of financial resources seems to be an obstacle to CSR in SMEs (BergerDouce, 2008; Gadenne et al., 2009; Imbs and Lalao, 2013; Lepoutre and Heene, 2006; Temri, Strong, 2009). The economic performance or the profitability of the SME can be considered as determinants of CSR. On the other hand, the study by Berger-Douce (2008) shows that the commitment of profitable SMEs in terms of CSR does not differ from other firms.

The age of the company reflects its cognitive dimension and represents a determinant of CSR (Labelle and St-Pierre, 2015). It is one of the factors involved in the design of organization (Marchesnay, 1988). The company’s experience would affect its perception of benefits generated by CSR (Torugsa et al., 2012). CSR in SMEs can also be seen as the construction and operation of an opportunity in the form of an innovation (Berger-Douce, 2011). Some works have shown that innovative SMEs are the most committed to SD, and that the capacity of innovation of SMEs represents an organizational determinant of the integration of responsible practices (Labelle and St-Pierre, 2015; Spence et al., 2007; Spence et al., 2011; Tang and Tang, 2012).

• Individual factors

The personality of the leader is the main element that guides the CSR approach in the SMEs (Berger-Douce, 2008; Del Baldo, 2006; Gond and Igalens, 2016; Jenkins, 2004; Labelle and St-Pierre, 2015; Lapointe and Gendron, 2005; Lepoutre and Heene, 2006; parades, 2007). The organization of the SME is centered around the manager. The establishment of a CSR approach requires a specific approach adapted to the nature of this organization. It is based on the personal motivation of the entrepreneur (Oueghlissi, 2013) and on his personal ethics which guide the company’s commitment in terms of CSR (Paturel and Berger-Douce, 2008). The manager’s sensitivity to business ethics will guide its decision to devote funds to the development of proactive SD approaches. In the otherwise, it can be an additional brake, if the leader ignores or disapproves possible responsible actions (Oueghlissi, 2013). Labelle and St-Pierre (2015) combine seven individual determinants of CSR in SMEs relating to the manager: gender, age, training, intentions and perceptions, profit attitude and values.

– Gender: some studies highlight the greater sensitivity of female entrepreneurs SD issues compared to men (Lamsa et al., 2008; Schaper, 2002), explained mainly by the maternal management style they adopt, rather than a authoritarian style (Labelle and St-Pierre, 2015). As for Paradas et al. (2012), Labelle and StPierre, (2015) as well as Paradas et al. (2017), they find no difference between the commitment of leaders of both genders.

– Age: for Aka and Labelle (2010) and Vives (2006), young managers are more sensitive in terms of ethical values. As for Vives (2006), Peterson and Jun (2009) and Labelle and St-Pierre (2015), they point out that older leaders are more sensitive to ethical issues. The experience is thus raised as a bearer of “training” (Paradas et al., 2017, p. 213), and adds to the greater integration of leaders in society, religious values ​​carrying principles similar to CSR and the financial independence that generally comes with age (Labelle and St-Pierre, 2015). On the other hand, Cassells and Lewis (2011) find no link between the age of the manager and the responsible commitment of SMEs.

– Training: or “schooling” (Labelle and St-Pierre, 2015, p. 169) is a source of sensitivity and commitment to CSR (Gadenne et al., 2009; Schaper, 2002; Paradas et al., 2017; Vives, 2006). This can be explained by the fact that subjects dealing with CSR and SD are often dealt with at higher levels of education, and that educated people are more curious and more willing to learn more sustained from the consequences of these new trends, and are better able to apprehend the difficulties or risks (Aka and Labelle, 2010; Labelle and St-Pierre, 2015).

– The intentions and perceptions of the leader are influenced by the domain of specialization. Each domain favors a particular vision of reality, according to the values specific to it (Labelle and St-Pierre, 2015). A low degree of specialization can represent an obstacle to the implementation of a CSR approach because of the skills limited, ignorance of the legislation or the solutions available. On the contrary, low specialization can be an asset in the ability to mobilize all the company by simple informal coordination (Delchet 2007; Imbs and Lalao, 2013).

– The manager’s attitude towards profit determines CSR in SMEs. The effects of actions of CSR rarely translate into quantifiable results in the short term (Berger-Douce, 2007b). This would explain the fact that managers seeking only to maximize their profit will pay greater attention to the economic dimension and will therefore be less sensitive to CSR. Informing managers about the economic benefits of CSR could be considered as a lever for the implementation of a responsible approach in SMEs (Lourenco et al., 2012).

– Values ​​are an “indispensable” determinant of CSR in SMEs (Labelle and St-Pierre, 2015, p. 170) and partially explain it (Biwolé et al., 2007; Del Baldo, 2006; Fassin et al., 2011; Murillo and Lozano, 2006; Temri and Fort, 2009; Santos, 2011; Paturel and Berger-Douce, 2008). This is due to the nature of the very organization of the SME, which is more sensitive to respect for the values, beliefs and culture of the environment (Jenkins, 2004; Vives, 2006). In definitively, “CSR cannot be achieved without a profound transformation of the motivations managerial and values” (Imbs and Lalao, 2013, p. 40).

2. External influencing factors of CSR

Bon and Taccola-Lapierre (2015), Courrent (2012), Jenkins (2004; 2009) and Spence et al., (2007) point out that few SMEs integrate CSR approaches under pressure from their PP because of their low media visibility, which does not include them in a logic of response to a social expectation. However, PPs may have CSR requirements that leaders perceive as business opportunities (Jenkins, 2009). As part of partnerships with large companies, SME suppliers or subcontractors are found in the CSR loop. Quairel and Auberger (2007) identified two different visions that these large SME partners can have. A “messianic” vision which leads them to promote CSR practices within their chain of supply, in particular with their suppliers and subcontractors, and a vision defensive which is situated in a context where the PPs are powerful and where the responsibility of the customer is called into question and poses a significant risk to his reputation. Gautier (2015) categorizes SME PPs into three types: embedded PPs, these are PPs with prioritize (Bon, 2007) and who are the collaborators, main stakeholders (Spence et al., 2007; Laarraf et al., 2015). Then, the PPs exerting an economic pressure, which emanate from the fabric the economy and the local community (Berger-Douce, 2008). They are part of the chain value of the company, mainly large companies, and is found in integration into a process of standardization or labeling of the CSR approach in SMEs (Hattabou and Louitri, 2011). In this case, CSR takes the form of a process to strengthen the value chain (Gond and Igalens, 2016). Point and Gendron (2004) specify that these pressures often come from principals committed to a CSR approach. Finally, the PPs eliciting an instrumentalized response constitute the third category. They are more about incitement than pressure as an institutional motivation, thus engendering different behaviors” adaptations” of SMEs to the local institutional framework (Labaronne and Gana-Oueslati, 2011). In this sense, Wood (1991) considers that CSR is mainly understood through the legitimacy. It is a “symbolic” resource that the form must manage (Quairel and Inn, 2005; parades, 2007). It is determined subjectively and varies depending on the context to another. Furthermore, the relationships that the company wishes to maintain with its partners are considered to be a determining factor in the CSR of SMEs (Berger-Douce, 2008). This can become a management objective as well as a legitimate response to the expectations of partners (Bonneveux and Saulquin, 2009). It is seen as a search for well-being collective, for the benefit of the company of course, but also of its main players and partners (Asselineau and Cromarias, 2011). In addition to these motivating factors, the perception of positive effects of CSR also plays a role in motivating business leaders. SMEs to adopt responsible approaches (Berger-Douce, 2008). The involvement of employees, the possibility of easier access to capital, the improvement of notoriety, relationship with partners and competitive advantage, lower costs related to the consumption… (Berger-Douce, 2008; Jenkins, 2009; Luetkenhorst, 2004; Santos, 2011; Quairel and Auberger, 2005). Business leaders with a vision favorable to SD, perceiving external pressures as opportunities and internal resources as easily mobilized forces engage their company more intensely in SD. Paradas et al. (2017) discuss the sensitivity of SMEs to their contexts in the CSR issues. It is clear that attitudes and behaviors are changing from one context to another. The contingency principle (Mintzberg, 1992) comes into play because organizations are structured according to their business context (Labelle and StPierre, 2015). industry, their leaders, their political and legal systems can incite or even compel companies, including SMEs, to adhere to SD principles (Labelle and StPierre, 2015). The variation in the behavior of SMEs with regard to CSR is observed in several studies (Ben Boubaker Gherib and Berger-Douce, 2008; St-Pierre et al., 2012; Fassin et al., 2015; Matten and Moon, 2008; Spence et al., 2011; Paradas et al., 2017; Vives, 2006). These differences are mainly due to economic, political, legal conditions and cultural (Matten and Moon, 2008), as well as industrial characteristics (Chiu and Sharfman, 2011), the age of CSR and SD issues in the country (Paradas et al., 2017) and the strength of the influence of the PPs (Sharma and Henriques, 2005; Tang and Tang, 2012). Labelle and St-Pierre (2015) point out that these variations can even be observed from a region to another, and from one industry to another. The activity in the sector industry can be a determining factor in the type of CSR implemented by SMEs (Spence, 2007; Vives 2006).

4. CEO characteristics and CSR
   1. CEO characteristics 

A characteristic is a component that assistance to recognize someone or something. A characteristic can be applied to feelings, mentalities, ways of behaving, and traits. Besides, a characteristic can likewise describe physical, demographic, and social features of a CEO. The accompanying section gives instances of CEO characteristics. CEO characteristics can be figure out contingent upon the instruction of the CEO, external factors affecting the individual, or the internal features of the CEO. For example:

• Education: Which field of study, MBA or not, PhD or not.
• External factors: Places lived, has lived in an emerging country or not, married or single, having children or not.
• Internal features: Political views, age, willing to donate money to charity.

Other groupings of characteristics exist, for instance: 

• Personality (individual, social and moral characteristics).
• Background (the socio-demographic background of the CEO).
• Experience (instruction, professional and individual experience).

2. CEO personality traits and CSR

• Ability to learn from the past

A CEO must have the ability to learn from past experiences and instill lessons for the future. CEOs are only human. Mistakes will happen, but it is important that a CEO learn from them to prevent them from happening again. For example, if a CEO did not have an effective crisis management system in place when a situation arose, he or she should learn what they need for future reference and be able to build a plan based on what went wrong the first time.

• Strong communication skills

As a leader, a CEO needs strong communication skills. Communication is key in any setting and as someone in charge, a CEO must learn how to communicate effectively to boost moral when necessary. From motivating his or her team to completing projects in a timely manner, a CEO must be able to communicate what they need, from whom, when they need it by and how things should be done. According to a Navalent study on Developing Exceptional Executives, “Top executives are consistently transparent and balanced in their communication. They effectively translate their view of business potential and challenges, as well as expectations for action using succinct, direct and readily understandable language in doses that are easily digestible. They devote time to their connections.”

• Building relationships

A CEO must have the ability to build relationships with clients and coworkers to be successful. Relationships create loyalty and an image for the CEO and the company. Positive relationships also create great word-of-mouth, and while your business may not run solely on that type of marketing, it’s always a plus.

• Realistic optimism

It’s important for a CEO to be confident, but not arrogant about their skills and what they offer their employees. They should remain aware of and confront challenges while still striving to reach audacious goals.

• Understanding

A CEO must be understanding of matters in and out of the workplace. Employees are people with lives outside of work, and if there’s an emergency, a CEO should be understanding and let the employee handle it. The risk of making mistakes is far greater if an employee is working and focused on other things. A CEO must also understand things happen out of anyone’s control. In sales, sometimes a customer can suddenly change their mind. A CEO must understand and accept the situation and handle things accordingly.

• Listening skills

The same Navalent study mentioned above states, “Top executives are distinguished by the consistency with which they listen to, and actively seek out the ideas and opinions of others. They incorporate other views into their plans to solve organizational problems.” A good CEO must have the ability to listen attentively. Not every idea a CEO has is going to be a good one, and not every direction is the right one. When a CEO can listen and seek the ideas of trusted individuals, the team and company is more likely to be successful.

• Willingness to take calculated risks

Great, and sometimes unforeseen opportunities often come from taking risks. Taking calculated risks shows confidence and helps you grow as a business leader. Often times, risky decisions may take you on a new, important path. Success will not be handed to you on a silver platter. Embracing risk also helps you overcome the fear of failing.

• Reading people and adapting to necessary management styles

One of the greatest traits a CEO can have is the ability to read people and adapt management styles accordingly. Not everyone has the same learning style and if you want your company and your employees to succeed, it is important to be able to adapt to the needs of your employees.

• Coaching employees effectively

As the head of a company, you are creating a healthy and collaborative work environment. You are not only preparing the next generation of your company but the next generation in your line of work. It is your job to give your employees the tools they need to be successful. You must be able to teach and train in a way that inspires your staff to succeed.

• Thinking outside the box

While it may seem like an obvious fact, the market changes with the times. It is important to think outside the box because sometimes there are better ways to achieve business goals. Sometimes, the same tried and true methods do not always work. When a CEO thinks outside the box, it makes them and their company stand out to customers and prospects.

There are several other factors that add to the qualifications of a good CEO, such as experience, but these key traits will keep you ahead of the curve. If you are lacking in any of these areas, researching personal improvement skills, learning from other executives or investing in a business mentor are also great ways to grow personally and professionally.

5. Conclusion and Future Directions

The findings of this dissertation mainly contribute to two works of literature. First, regarding the upper echelon theory, this study has proposed a new dependent variable by investigating not only the influence of CEOs on firm strategy and performance but also their impact on CSR practices implementation. This can help understand the CSR performance of a firm over another one or can help corporate boards to choose a CEO over another one if they want to focus on CSR implementation. Second, regarding CSR literature, this dissertation has focused on the causes of CSR strategies rather than on their consequences. Contributing to previous research focusing on the effects of CSR practices but not on what motivates firms to carry out CSR practices in the first place. This can help understand the mechanisms behind CSR implementation and know what is required beforehand to implement relevant CSR strategies.

The findings of this study provide valuable insights to policymakers and practitioners to legislate effective regulations on CEOs and conduct supervision on CSR reporting and disclosure while considering the different motivations that influence family firms toward CSR reporting. To investors, our results may encourage them to invest in firms where the CEO has been in office for a long time because a longer-tenured CEO leads to more positive CSR results. To the stakeholders, our findings suggest that firms with long-tenured CEOs tend to be more socially responsible. Further, the results of this study indicated that interactions between CEO tenure and CEO nationality with family ownership are negative and significant; suggesting that increased family ownership in firms weakens the positive association between CEO tenure and CSR disclosures, consistent with the entrenchment hypothesis. Finally, the findings of this study should assist in assessing the potential contribution of appointing expatriate CEOs to lead Saudi firms towards the accomplishment of different country 2030.

Like other studies, this study is not without limitations that pave the way for future empirical studies. While the percentage of foreign directors in Saudi firms has been increasing, more research is required to validate the influence of foreign CEOs. Our study did not find a clear relationship between CEO nationality and authentic CSR activities. This suggests the heterogeneity in the effects of the local/foreign CEO on CSR. The channel through which the nationality of the CEO may create authentic CSR is much more complex than the simple dichotomy of Saudi versus non-Saudi CEO. Future research may consider whether Saudi CEOs’ foreign exposure or non-Saudi CEOs’ prior work experience in the region, subject to data availability, plays any role in influencing CSR transparency. Another limitation is the small sample size, because the required data from 2010 to 2019 for most listed firms were unavailable, which means the results may not be generalizable to other countries. The difficulty and complexity of gathering data on the profile of CEOs restrict the opportunity to investigate additional behavioral biases and demographic factors. Therefore, research carried out in the future could be enriched by investigating the impact of the relationship between different CEO characteristics and CSR, as well as incorporating additional research methods, such as CEO interviews, surveys, and in-depth case studies, to ascertain corporate management’s perceptions of CSR participation. Despite the inherent limitations associated with data availability and the small sample size that beset most corporate governance studies in the MENA region, this study paves the way for future investigations on the heterogeneity of family businesses and other contingency factors that drive the CEO profiles and CSR relationship in the MENA region and elsewhere.

References

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• Steven Scalet & Thomas Kelly, 2010. “CSR Rating Agencies: What is Their Global Impact?,” Journal of Business Ethics, Springer, vol. 94(1)
• Jiang et al., 2010; Bamber et al., 2010 and Demerjian et al., 2013 – What’s My Style? The Influence of Top Managers on Voluntary Corporate Financial Disclosure.
• Heaton, J.B. (2002) Managerial Optimism and Corporate Finance. Financial Management, 31, 33-45.
• Brown et al., 2012. Social Activity and Cognitive Functioning Over Time: A Coordinated Analysis of Four Longitudinal Studies.
• Ulrike Malmendier and Geoffrey Tate Journal of Financial Economics, 2008, vol. 89, issue 1, 20-43.