CEOs’ political orientation and corporate political activities as enablers of ESG performance

Abstract

Purpose

This study aims to clarify the influence of different CEO’s political orientation (liberal/conservative) and corporate political activity on ESG performance, considering contingencies related to CEO attributes and corporate governance mechanisms.

Design/methodology/approach

Using a sample of 131 companies from the Standard and Poor’s 500 index, this study employs fuzzy-set Qualitative Comparative Analysis (fs/QCA) to analyze combinations of conditions (i.e. configurations) that lead to greater ESG (i.e. environmental, social, and governance) performance.

Findings

Drawing on the upper echelon theory and the theory of social exchange, the findings show that different CEO’s political orientation (liberal/conservative) can contribute to ESG performance, depending on the combination of conditions. Furthermore, the results emphasize the importance of corporate political activity as a core condition to enhance ESG performance.

Originality/value

Taking a configurational approach, this study explores combinations of conditions that explain ESG performance, including CEO’s political orientation and corporate political activities as antecedent conditions. Unlike past research, this study examines possible complementarities between these two conditions and assumes that different CEO’s political orientation can have a positive influence on ESG performance, depending on the combination of conditions.

Citation

Coelho, E., Augusto, M. and Torres, P. (2024), "CEOs’ political orientation and corporate political activities as enablers of ESG performance", Management Decision, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-07-2023-1309