CEOs With Strong CSR Record More Likely To Be Unethical

CEOs with a strong record of taking care of their stakeholders are more likely to break that record at a later date.

Chief executive officers with a strong record in corporate social responsibility are more likely to engage in less ethical treatment despite maintaining an appearance of morality.

That’s according to new research from Margaret Ormiston, assistant professor of organisational behavior at London Business School and Dr Elaine Wong from University of California, Riverside.

CEOs with a track record of taking care of their stakeholders are more likely to break that record at a later date since they feel that they have accrued moral credits from prior ethical behaviour, they said.

“CEOs with a strong track record in corporate social responsibility are more likely to think that they can behave in a socially undesirable way without fear of discrediting their image,” said Ormiston.

“This is much like someone who is a healthy eater for 11 months out of 12 and indulges during the holiday season. A generally healthy diet gives them confidence that they will not be discredited as an unhealthy person.”

Experts said that CEOs who feel it is important to be seen as leading by moral example are more likely to engage in unethical behaviour.

“Top leaders may feel that when they have acquired moral credits through a CSR strategy that balances the needs of multiple stakeholders, they can then put forth a strategy that cuts corners or is potentially harmful to stakeholders,” said Ormiston.

Every company’s board should closely monitor the CEOs’ management of the firms’ varied stakeholders, the research suggested. Experts said that this is especially important after a particularly good year of managing the needs of the stakeholders.

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