دانلود رایگان مقاله انگلیسی ریسک مدیریتی انگیزه، مسئولیت اجتماعی شرکتی و ریسک شرکت - الزویر 2018

Abstract

We examine if and how corporate social responsibility (CSR) affects the relation between risk taking incentives of CEO compensation (i.e. vega of CEO compensation) and measures of firm risk. Empirical results show that vega has a positive and significant effect on firm risk only in low CSR firms that attempt to maximize only investing stakeholders’ interests. In high CSR firms, that attempt to balance the interests of both investing and non-investing stakeholders, vega has no effect on firm risk. These findings are consistent with previous work that finds that CSR goals alter firm behavior as it tries to accommodate the (often divergent) interests of other stakeholders beyond the traditional shareholders.

Discussion and conclusion

The link between CEO compensation incentives and firm risk has been widely discussed in the economics, finance and management literature. Most of these studies measure CEO risk taking incentives using the vega of equity based compensation and find a positive and significant association between vega and firm risk. In this study, we argue that CEO risk taking incentives emanating from equity linked compensation are based on the agency theory, which views maximization of shareholder wealth as the primary goal of a corporation and ignores other stakeholders that are essential to the long run survival and profitability of a firm. The stakeholder theory posits that firms invest in CSR to balance the interests of all stakeholders, including the shareholders. Therefore, it is important to differentiate between firms that rank high on social performance and those that rank low. This distinction is necessary because firms that rank high on CSR make an intentional effort to balance the interests of both the investing (shareholders) and the non-investing (customers, employees, community etc.) stakeholders, instead of only investing stakeholders. This added goal of stakeholder interests’ maximization moderates the relation between vega and firm risk, as CSR adds another constraint to a CEO’s ability to take risk. Moreover, CSR provides an insurance-like downside protection in the event of poor financial performance and mitigates the effect of vega on firm risk. The empirical results obtained in this study are consistent with these predictions. Vega is positively associated with firm risk only in firms that make maximization of shareholders’ interests their primary goal rank and rank low on CSR performance. On the other hand, firms that make maximization of all stakeholders’ interests their primary goal rank high on CSR performance. For such firms the effect of vega on firm risk is muted, leading to an insignificant relation. Overall, these results suggest that the positive association between vega and firm risk found in previous literature seems to be influenced or even driven by firm social performance.