NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, October 19, 2017

As a consumer, you may feel a little better knowing that stores where you shop pay their workers a fair wage, hire a diverse workforce and avoid polluting the environment. But if you’re a CEO trying to run your business in this way — known as practicing corporate social responsibility — you may actually be taking on an unexpected personal risk, a new study finds.

Indeed, CEOs of socially responsible companies are actually 84% more likely to be fired than counterparts at less socially responsible companies — if the firms in question suffer similarly poor financial performance, according to a paper in Strategic Management Journal from researchers at the University of Oregon, University of Georgia and University of Notre Dame.

Now, the study found this trend can cut both ways: CEOs of financially successful CSR companies are indeed less likely to be dismissed. But that effect is not as strong — giving those CEOs whose firms do good and do well only a 53% decrease in firing likelihood.

Photo courtesy of miuenski miuenski.