ESG: CEO CHARACTERISTICS, INSTITUTIONAL INVESTORS AND BRAND EQUITY
GRADUATE RESEARCH DISSERTATIONS
CHAIR: PRAMOD IYER, PH.D. | SECOND: NIK NIKOLOV, PH.D. | READER: LEO MACDONALD, PH.D.
BUSINESS IMPACT
SCHOLARLY ABSTRACT
Research in marketing and management has sought to answer why organizations devote resources and effort to invest in environmental, social, and governance (ESG) initiatives. As such, scholarly attention has begun to focus more on understanding the antecedents of ESG, frequently through the lens of stakeholder theory. Scholars have also focused on the role of the CEO in ESG because the CEO, as leader of the firm, shapes the values and orientation of an organization and plays a pivotal role in setting the firm’s strategic actions. Hubris is a prominent character trait of many corporate executives. Narcissism and psychopathy are also the most prominent negative personality traits discussed in psychological and management literature. But how do other stakeholders of the firm protect their inter - ests if the CEO’s cognitive traits bias ESG participation? Traditionally, firms have given priority to larger institu - tional stakeholders while tending to ignore the voices of retail investors whose individual power is too diffused to exert any significant influence on the case for ESG invest - ments. I use upper echelon theory (UET) and stakeholder theory to focus on how undesirable CEO characteristics influence ESG performance. While prior research on ESG has concentrated on a limited number of CEO personali - ty traits, this research expands and provides new insights into CEO characteristics and presents a model for how and why other stakeholders may affect the role of the CEO in driving ESG performance and brand equity (BE).
“Dark” CEO traits (hubris, narcissism, psychopathy) shape ESG strategy and outcomes.
Boards and CHROs should explicitly incorporate psy - chological risk into CEO selection, evaluation, and suc - cession planning—especially where ESG and brand equity are central to strategy. Governance mecha - nisms (e.g., ESG‑linked KPIs, strong independent directors) can be designed to counterbalance self‑serving ESG behaviors. Institutional investors and ESG‑linked compensation can moderate the effect of CEO traits on ESG and brand equity. Investor‑relations and comp committees can strategically use ESG‑linked pay and active engagement with long‑term oriented institutional holders to “channel” even ego‑driven CEOs towards ESG actions that genuinely build brand equity rather than symbolic gestures. The model integrates UET and stakeholder theory to explain when and why CEOs pursue ESG. Strategy and sustainability teams can use this framework as a diagnostic: map CEO traits, stakeholder power (insti - tutional vs retail), and incentive design to anticipate how strategic initiatives like ESG will really be prioritized— and where extra governance safeguards or stakeholder pressure are needed.
SOWMDEB SEN, PH.D.
Keywords: ESG, CEO, Brand, Stakeholders, Compensation, Investors.
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