CEO Inherited Altruism and Firm Corporate Social Responsibility

We examine the impact of CEO’s altruism on firm corporate social responsibility performance (CSR). We measure CEOs’ altruism as an inherited cultural measure using the Global Preference Survey scores associated with the CEOs’ ancestral countries of origin. Firms led by more altruistic CEOs have stronger CSR performance after controlling for firm financial and corporate governance attributes and other CEOs’ characteristics. The result survives several robustness and endogeneity checks, including propensity score matching and difference-in-difference regressions around exogenous CEO turnover events. The link between CEO inherited altruism and CSR is stronger in well-governed firms where CEOs are not overly-powerful. Also, the altruistic nature of the CEO is not value-destroying for shareholders; instead, for smaller under-performing firms it helps shielding stock returns from crisis and recessionary periods.