Citation

Discussion Paper Details

Please find the details for DP4648 in an easy to copy and paste format below:

Full Details

Title: Corporate Social Responsibility and Managerial Entrenchment

Author(s): Giovanni Cespa and Giacinta Cestone

Publication Date: September 2004

Keyword(s): corporate governance, corporate social responsibility, managerial entrenchment, social activism and stakeholders

Programme Area(s): Financial Economics

Abstract: When stakeholder protection is left to the voluntary initiative of managers, relations with social activists may become an effective entrenchment strategy for inefficient CEOs. We thus argue that managerial turnover and firm value are increased by the institutionalization of stakeholder protection depriving incumbent CEOs of activists? support. This finding provides a rationale for the emergence of specialized institutions (social auditors and ethic indexes) that help firms commit to stakeholder protection even in case of managerial replacement. Our theory also explains a recent trend whereby social activist organizations and institutional shareholders are showing a growing support for each others? agenda.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4648

Bibliographic Reference

Cespa, G and Cestone, G. 2004. 'Corporate Social Responsibility and Managerial Entrenchment'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4648