Corporate Governance and Executive Compensation for Corporate Social Responsibility

Bryan Hong*, Zhichuan Li, Dylan Minor

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

83 Scopus citations


We link the corporate governance literature in financial economics to the agency cost perspective of corporate social responsibility (CSR) to derive theoretical predictions about the relationship between corporate governance and the existence of executive compensation incentives for CSR. We test our predictions using novel executive compensation contract data, and find that firms with more shareholder-friendly corporate governance are more likely to provide compensation to executives linked to firm social performance outcomes. Also, providing executives with direct incentives for CSR is an effective tool to increase firm social performance. The findings provide evidence identifying corporate governance as a determinant of managerial incentives for social performance, and suggest that CSR activities are more likely to be beneficial to shareholders, as opposed to an agency cost.

Original languageEnglish (US)
Pages (from-to)199-213
Number of pages15
JournalJournal of Business Ethics
Issue number1
StatePublished - Jun 1 2016


  • Agency costs
  • Corporate governance
  • Corporate social responsibility
  • Executive compensation
  • Incentives for CSR
  • Non-financial performance measures

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Law


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