Business Ethics and Corporate Social Responsibility

The Power of One to Make a Difference: How Informal and Formal CEO Power Affect Environmental Sustainability

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We theoretically discuss and empirically show how CEO power based on environmental expertise and formal influence over executives and directors, in the absence and presence of shareholder activism, spurs firms towards greener strategies. Our results support the idea that CEOs with informal power, grounded in expertise, reduce corporate environmental impact and this relationship is amplified when the CEO also enjoys formal power over the board of directors. Additionally, we find that any source of CEO power, whether informal or formal, is a good catalyst for transforming shareholder activism into corporate greening. However, in absence of such activism, only CEOs' informal environmental expert power acts as a determinant of firm environmental performance.
Bibliographic citation: Walls, J.; Berrone, Pascual, "The Power of One to Make a Difference: How Informal and Formal CEO Power Affect Environmental Sustainability", Journal of Business Ethics, Vol. 145, No. 2, 2017, pp 293 - 308

Reference: 10.1007/s10551-015-2902-z (DOI)
Date: 05/10/2017
Author(s): Walls, J.; Berrone, Pascual
Document type: Article in Journal (refereed)
Editor(s): Cátedra Schneider Electric de Sostenibilidad y Estrategia
Languages: English