Left, Right and CSR

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Corporate social responsibility (CSR) means going above and beyond business interests to take action for the greater good of society. If a firm’s CEO is politically liberal, is he or she more likely to advance CSR than a conservative leader? A new article published in Administrative Science Quarterly answers this question with a study of CEOs and their political leanings:

Not only did we find that CEOs’ ideology has a main effect on CSR (which, again, is amplified by CEO power), but we also hypothesized and found that politically liberal CEOs, relative to conservative peers, tend to be relatively unre- sponsive to their firms’ performance levels when advancing CSR; in line with their personal values, they emphasized CSR even when company performance was poor. This is intriguing evidence of executives’ values prevailing over con- textual conditions in corporate decision making. Conservative CEOs, by con- trast, were more sensitive to current performance levels, especially curtailing CSR initiatives when times were poor. This latter result suggests that conser- vative CEOs view CSR initiatives as optional acts of corporate citizenship that can be selectively undertaken as financial conditions permit. Liberal CEOs appear to be more unconditional supporters of CSR, whereas conservative CEOs are ‘‘fair weather supporters,’’ who advance CSR when they believe they can spare the resources to do so.

Read the article, “Political Ideologies of CEOs: The Influence of Executives’ Values on Corporate Social Responsibility,” published by M. K. Chin, Donald C. Hambrick, and Linda K. Treviño, all of The Pennsylvania State University, in Administrative Science Quarterly’s  OnlineFirst section.