Baek, K.-J.; Yeo, Y.-J. The Impact of a De Facto CEO on Environmental, Social, and Governance Activities and Firm Value: Evidence from Korea. Sustainability2023, 15, 15308.
Baek, K.-J.; Yeo, Y.-J. The Impact of a De Facto CEO on Environmental, Social, and Governance Activities and Firm Value: Evidence from Korea. Sustainability 2023, 15, 15308.
Baek, K.-J.; Yeo, Y.-J. The Impact of a De Facto CEO on Environmental, Social, and Governance Activities and Firm Value: Evidence from Korea. Sustainability2023, 15, 15308.
Baek, K.-J.; Yeo, Y.-J. The Impact of a De Facto CEO on Environmental, Social, and Governance Activities and Firm Value: Evidence from Korea. Sustainability 2023, 15, 15308.
Abstract
This study analyzes the influence of CEO types on corporate governance, focusing on de facto (substantial) CEOs. We examine how substantial CEOs impact ESG activities (Hypothesis 1) and corporate value (Hypothesis 2). Data were collected from KIS-VALUE and DART (Electronic Disclosure System) of the Financial Supervisory Service, defining substantial CEOs as highest remuneration recipients exceeding the representative director of the company pay. Results sup-port Hypothesis 1, showing companies with substantial CEOs are more engaged in ESG activities, potentially to improve public image while concealing self-serving behaviors. Hypothesis 2 is validated, indicating lower corporate value in companies with substantial CEOs due to prioritizing personal interests over long-term profit maximization. Despite limitations in exploring governance relationships beyond remuneration data, the study offers key contributions. It expands research on corporate governance and ESG activities by identifying substantial CEOs through objective remuneration data. It highlights the importance of an independent board for transparent governance and positive corporate value. Lastly, empirical evidence shows the negative impact of misdirected ESG activities on corporate value. By using remuneration as an indicator, this study illuminates substantial CEOs' influence on corporate value and ESG activities, providing insights for future research in corporate governance and ESG.
Keywords
Corporate governance structure; De facto CEO (substantial CEO); Corporate value; ESG activities
Subject
Business, Economics and Management, Accounting and Taxation
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
