DCC - Brownbag - Youssef El Fassi, assistant diplômé, HEC Lausanne

This study revisits the relationship between corporate social responsibility (CSR)
and CEO turnover by replicating and extending the works of Hubbard et al. (2017) and Shin et al. (2022). Using similar measures and analytical methods, we analyze over 19,000 firm-year observations from 2002 to 2021, covering both U.S. and Western European firms of varying sizes. Our findings confirm and extend the original studies, demonstrating that Hubbard et al.’s negative moderating role of CSR in the financial performance-CEO dismissal relationship remains valid in the pre-2010 period, while Shin et al.’s positive moderating role of CSR holds in the post-2010 period. This confirms a significant temporal shift in CSR’s role: prior to 2010, high CSR increased the likelihood of CEO dismissal in poorly performing firms, whereas post-2010, CSR mitigated dismissal risk, reflecting a broader transition from shareholder- to stakeholder-oriented governance. Expanding the analysis to European firms, we provide evidence that these temporal dynamics hold across different institutional and regulatory contexts, reinforcing the robustness of CSR’s evolving role in CEO turnover decisions.
Furthermore, we extend this research by examining small firms and find no evidence that CSR affects CEO turnover in this group, suggesting that these findings do not generalize to smaller firms where stakeholder scrutiny is lower.