Green CEO, managerial ability and environmental performance

Adhitya Agri Putra · Nanda Fito Mela · Ferdy Putra

17 citations0/0 files storedSocial Responsibility Journal

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Environmental Sustainability in Business Corporate Social Responsibility Reporting Sustainable Supply Chain Management

Abstract

Purpose This research aims to examine the moderating role of green chief executive officer (CEO) in the effect of managerial ability (MA) on environmental performance (ENV). Design/methodology/approach This research’s sample consists of 197 manufacturing firm-years that are listed on the Indonesian Stock Exchange and the Program Penilaian Peringkat Kinerja Perusahaan Dalam Pengelolaan Lingkungan Hidup (PROPER) participants. Data analysis use industry- and year-effect regression analysis. Findings The result shows that MA improves ENV when led by a green CEO. It indicates that a green CEO with higher MA considers environmental responsibilities as a valuable investment to create business competitive advantages and sustainability. Research limitations/implications First, this research only uses the PROPER participants as the research sample. Second, by nature, MA measurement errors might still exist because it is hard to determine the MA with qualitative factors. Third, this research does not split the environmental responsibilities into a wider spectrum, such as environmental–business, environmental–regulation or environmental–ethical spectrum. Originality/value This research provides new evidence that higher MA by green CEO increases ENV in Indonesia. This research also gives a contribution to fill the inconsistent previous findings of MA and ENV.

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References

1984Upper Echelons: The Organization as a Reflection of Its Top Managers 1962Investment in Human Capital: A Theoretical Analysis 1982Moral Hazard in Teams 2007Upper Echelons Theory: An Update 2010Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility Reporting 2010The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice 2001Shareholder value, stakeholder management, and social issues: what's the bottom line?2000Corporate Social Performance As a Competitive Advantage in Attracting a Quality Workforce

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