Good Apples in Business Barrels: The Moderating Impacts of CEOs’ Business Background and Corporate Governance Training on Corporate Social Responsibility

Abstract

In the literature, the effect of chief executive officer (CEO) tenure on corporate social responsibility (CSR) performance is found to be positive, negative, or neutral, and we know little about what factors explain variation in firm CSR participation over time. This inconclusive pattern suggests a more complicated mechanism at work than the traditional focus on simple linear associations. This study anchors itself on the upper echelons theory (UET) to unveil the sophisticated effects of CEO tenure on CSR over their regimes. For this purpose, we adopted regression analysis for panel data with random-effects probit specification and considered the data of 1,722 firm-year observations of Taiwanese listed companies in high-tech industries from 2014 to 2021. We, therefore, propose that there is an inverted U-shaped relationship between tenure and CSR. Further, sparked by the metaphor for ‘good apples’ or ‘bad apples’ in barrels, this article represents an extended arm of this seminal work to examine how ethics intervention adjusts CSR. We argue that the CEO’s business background (good apples) and corporate governance training (good barrels) moderate this relationship to benefit CSR performance. Beyond its academic contribution, this study offers insights to managers and practitioners that ethics interventions in schooling and later in business stimulate CSR activities.