Do Titans deliver the ESG promise? Societal Recognition and Responsible Corporate Decisions

Hisham Farag (Lead / Corresponding author), Santosh Koirala, Di Luo, Sandeep Rao

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Abstract

Distinguished societal recognition can influence corporate decision-makers to act responsibly. We exploit this unique sociological attribute of UK firm board members and examine honorary titles' impact on the firm’s environmental, social, and governance (ESG) performances. Using the peerage and honorific titles of board members of public UK firms from 2002 to 2020, we demonstrate that firms wherein board members have a title of honour are associated with higher ESG performance. We also document a positive contagion effect of titleholders on other board members, which contributes to firms’ ESG performance. Our findings align with theories of resource dependence, upper echelons and peer effects postulations and highlight the importance of societal recognition in shaping corporate decisions towards sustainability.
Original languageEnglish
Number of pages25
JournalBritish Journal of Management
DOIs
Publication statusPublished - 7 Nov 2024

Keywords

  • ESG
  • Honorific title
  • Peerage system
  • Resource dependence
  • Upper echelons
  • Peer effects
  • Board of directors
  • Board characteristics

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