Does CEO Education Moderate Managerial Ability on ESG (Environmental, Social, and Governance)?
Downloads
This study seeks to examine the influence of CEO education on the correlation between managerial competence and ESG. This study employs a sample of 185 observations from 37 manufacturing firms listed on the Indonesia Stock Exchange (IDX) from 2018 to 2022. This study used the weighted least squares regression model for estimation purposes. The research findings indicate that managerial skill impacts ESG, aligning with legitimacy theory. The theory suggests that superior managerial capability facilitates an understanding of stakeholder demands through ESG disclosures, thereby enhancing a company’s reputation and legitimacy. Nevertheless, the outcomes indicate that CEO education as a moderating element does not enhance the impact of managerial competence on ESG. A manager’s education does not influence ESG disclosure. The limited sample of manufacturing enterprises that issue ESG disclosure reports and the temporal scope, spanning only five years, constrain the research.
Downloads
Ammer, M. A., Aliedan, M. M., & Alyahya, M. A. (2020). Do Corporate Environmental Sustainability Practices Influence Firm Value? The Role of Independent Directors: Evidence from Saudi Arabia. Sustainability, 12(22), 9768. https://doi.org/10.3390/su12229768
Amore, M. D., Bennedsen, M., Larsen, B., & Rosenbaum, P. (2019). CEO Education and Corporate Environmental Footprint. Journal of Environmental Economics and Management, 94, 254–273. https://doi.org/10.1016/j.jeem.2019.02.001
Baik, B., Brockman, P. A., Farber, D. B., & Lee, S. (Sunghan). (2018). Managerial Ability and the Quality of Firms’ Information Environment. Journal of Accounting, Auditing & Finance, 33(4), 506–527. https://doi.org/10.1177/0148558X17742820
Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: Ten years after 1991. Journal of Management, 27(6), 625–641. https://doi.org/10.1177/014920630102700601
Bektur, Ç., & Arzova, S. B. (2022). The Effect of Women Managers in the Board of Directors of Companies on the Integrated Reporting: Example of Istanbul Stock Exchange (ISE) Sustainability Index. Journal of Sustainable Finance & Investment, 12(2), 638–654. https://doi.org/10.1080/20430795.2020.1796417
Bhowmik, T., Yasmin, S., & Eluru, N. (2022). Accommodating for Systematic and Unobserved Heterogeneity in Panel Data: Application to Macro-level Crash Modeling. Analytic Methods in Accident Research, 33, 100202. https://doi.org/10.1016/j.amar.2021.100202
Chen, J., Liu, X., Song, W., & Zhou, S. (2020). General Managerial Skills and Corporate Social Responsibility. Journal of Empirical Finance, 55, 43–59. https://doi.org/10.1016/j.jempfin.2019.10.007
Chen, J. V., Kama, I., & Lehavy, R. (2019). A Contextual Analysis of The Impact of Managerial Expectations on Asymmetric Cost Behavior. Review of Accounting Studies, 24(2), 665–693. https://doi.org/10.1007/s11142-019-09491-2
Chin, M. K., Zhang, S. X., Jahanshahi, A. A., & Nadkarni, S. (2021). Unpacking Political Ideology: CEO Social and Economic Ideologies, Strategic Decision-Making Processes, and Corporate Entrepreneurship. Academy of Management Journal, 64(4), 1213–1235. https://doi.org/10.5465/amj.2019.1228
Comyns, B. (2016). Determinants of GHG Reporting: An Analysis of Global Oil and Gas Companies. Journal of Business Ethics, 136(2), 349–369. https://doi.org/10.1007/s10551-014-2517-9
Cui, H., Chen, C., Zhang, Y., & Zhu, X. (2019). Managerial Ability and Stock Price Crash Risk. Asia-Pacific Journal of Accounting & Economics, 26(5), 532–554. https://doi.org/10.1080/16081625.2019.1636662
Dahinine, B. (2024). The Impact of Managerial Creative Capabilities on Task Performance: Evidence from Saudi Arabian Companies. Journal of Ecohumanism, 3(8). https://doi.org/10.62754/joe.v3i8.5567
DasGupta, R., & Pathak, R. (2024). CEO Education and Corporate Social Performance: Moderation Effects of CEO Characteristics and Firm’s Governance Quality. Benchmarking: An International Journal, 31(10), 3624–3654. https://doi.org/10.1108/BIJ-02-2023-0084
Deegan, C. M. (2019). Legitimacy Theory: Despite Its Enduring Popularity and Contribution, Time is Right for a Necessary Makeover. Accounting, Auditing & Accountability Journal, ahead-of-print(ahead-of-print). https://doi.org/10.1108/AAAJ-08-2018-3638
Doukas, J. A., & Zhang, R. (2020). Corporate Managerial Ability, Earnings Smoothing, and Acquisitions. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3854243
Du, K., & Wu, S.-J. (2019). Does External Assurance Enhance the Credibility of CSR Reports? Evidence from CSR-related Misconduct Events in Taiwan.
Fatemi, A., Glaum, M., & Kaiser, S. (2018). ESG Performance and Firm Value: The Moderating Role of Disclosure. Global Finance Journal, 38, 45–64. https://doi.org/10.1016/j.gfj.2017.03.001
Ferrara, F. (2022). The Development of Political Institutions: Power, Legitimacy, Democracy. University of Michigan Press. https://doi.org/10.3998/mpub.12013333
Gallego-Álvarez, I., Lozano, M. B., & Rodríguez-Rosa, M. (2018). An Analysis of the Environmental Information in International Companies according to the New GRI standards. Journal of Cleaner Production, 182, 57–66. https://doi.org/10.1016/j.jclepro.2018.01.240
Gao, S., Meng, F., Wang, W., & Chen, W. (2023). Does ESG always improve Corporate Performance? Evidence from Firm Life Cycle Perspective. Frontiers in Environmental Science, 11. https://doi.org/10.3389/fenvs.2023.1105077
García‐Sánchez, I., Aibar‐Guzmán, B., Aibar‐Guzmán, C., & Azevedo, T. (2020). CEO Ability And Sustainability Disclosures: The Mediating Effect Of Corporate Social Responsibility Performance. Corporate Social Responsibility and Environmental Management, 27(4), 1565–1577. https://doi.org/10.1002/csr.1905
García‐Sánchez, I., & Martínez‐Ferrero, J. (2019). Chief Executive Officer ability, Corporate Social Responsibility, and Financial Performance: The Moderating Role of the Environment. Business Strategy and the Environment. Business Strategy and the Environment, 28(4), 542–555. https://doi.org/10.1002/bse.2263
Ghaleb, B. A., Qaderi, S. A., & Almaqtari, F. A. (2024). CEO Attributes and CSR Reporting in Jordan: New Insight From the COVID-19 Pandemic Period. In The Emerald Handbook of Ethical Finance and Corporate Social Responsibility (pp. 47–67). Emerald Publishing Limited. https://doi.org/10.1108/978-1-80455-406-720241003
Ghardallou, W. (2022). Corporate Sustainability and Firm Performance: The Moderating Role of CEO Education and Tenure. Sustainability, 14(6), 3513. https://doi.org/10.3390/su14063513
Gupta, S., Dangayach, G. S., Singh, A. K., Meena, M. L., & Rao, P. N. (2018). Implementation of Sustainable Manufacturing Practices in Indian Manufacturing Companies. Benchmarking: An International Journal, 25(7), 2441–2459. https://doi.org/10.1108/BIJ-12-2016-0186
Harjoto, M. A., & Wang, Y. (2024). Economic Policy Uncertainty and Environmental, Social and Governance (ESG) Disclosure: The Moderating Effects of Board Network Centrality and Political Connections. Corporate Governance: The International Journal of Business in Society, 24(7), 1547–1576. https://doi.org/10.1108/CG-08-2023-0349
Hasan, M. M. (2020). Readability of Narrative Disclosures in 10-K Reports: Does Managerial Ability Matter? European Accounting Review, 29(1), 147–168. https://doi.org/10.1080/09638180.2018.1528169
Haski-Leventhal, D., Pournader, M., & Leigh, J. S. A. (2022). Responsible Management Education as Socialization: Business Students’ Values, Attitudes and Intentions. Journal of Business Ethics, 176(1), 17–35. https://doi.org/10.1007/s10551-020-04593-3
Hettler, B., Cordeiro, J., & Forst, A. (2024). Proving Their Mettle: Managerial Ability And Firm Performance In Trying Times. Journal of Contemporary Accounting & Economics, 20(1), 100393. https://doi.org/10.1016/j.jcae.2023.100393
Huang, G., & Shen, L. (2024). The Bidirectional Relationship between Digital Transformation and Corporate Social Responsibility: A Legitimacy Perspective. Sustainability, 16(7), 3029. https://doi.org/10.3390/su16073029
Jámbor, A., & Zanócz, A. (2023). The Diversity of Environmental, Social, and Governance Aspects in Sustainability: A Systematic Literature Review. Sustainability, 15(18), 13958. https://doi.org/10.3390/su151813958
Kalasin, K. (2024). Strategic Divestment Of Emerging Market Firms: The Influence Of Returnee Managers And CEO Characteristics. Journal of Global Mobility: The Home of Expatriate Management Research, 12(1), 93–125. https://doi.org/10.1108/JGM-04-2023-0029
Kao, M.-F., Jian, C.-H., & Tseng, C.-H. (2024). Managerial Ability and Voluntary ESG Disclosure and Assurance: Evidence from Taiwan. Sustainability Accounting, Management and Policy Journal, 15(1), 207–231. https://doi.org/10.1108/SAMPJ-08-2022-0428
Khan, M. K., Zahid, R. M. A., Shahzad, K., Hussain, M. J., & Kitendo, M. M. (2022). Role of Managerial Ability in Environmental, Social, and Economics Sustainability: An Empirical Evidence from China. Journal of Environmental and Public Health, 2022(1). https://doi.org/10.1155/2022/8588385
Kim, S., & Li, Z. (Frank). (2021). Understanding the Impact of ESG Practices in Corporate Finance. Sustainability, 13(7), 3746. https://doi.org/10.3390/su13073746
King, T., Srivastav, A., & Williams, J. (2016). What’s In An Education? Implications Of CEO Education For Bank Performance. Journal of Corporate Finance, 37, 287–308. https://doi.org/10.1016/j.jcorpfin.2016.01.003
Kong, W. (2023). The Impact of ESG Performance on Debt Financing Costs: Evidence From Chinese Family Business. Finance Research Letters, 55, 103949. https://doi.org/10.1016/j.frl.2023.103949
Kowalczyk, R., & Kucharska, W. (2020). Corporate Social Responsibility Practices Incomes and Outcomes: Stakeholders’ Pressure, Culture, Employee Commitment, Corporate Reputation, and Brand Performance. A Polish–German Cross-Country Study. Corporate Social Responsibility and Environmental Management, 27(2), 595–615. https://doi.org/10.1002/csr.1823
Kurniawansyah, D., & Simamora, N. R. (2023). Changes in Accounting Estimates for Disclosure Discrepancy in The Useful Life of Pot Reduction: Study Case in PT. XYZ (Persero) Indonesia. International Journal of Applied Business and International Management, 8(1), 140–153. https://doi.org/10.32535/ijabim.v8i1.2230
Lee, C.-C., Wang, C.-W., Chiu, W.-C., & Tien, T.-S. (2018). Managerial Ability And Corporate Investment Opportunity. International Review of Financial Analysis, 57, 65–76. https://doi.org/10.1016/j.irfa.2018.02.007
Levine, S. S., Bernard, M., & Nagel, R. (2017). Strategic Intelligence: The Cognitive Capability to Anticipate Competitor Behavior. Strategic Management Journal, 38(12), 2390–2423. https://doi.org/10.1002/smj.2660
Li, T.-T., Wang, K., Sueyoshi, T., & Wang, D. D. (2021). ESG: Research Progress and Future Prospects. Sustainability, 13(21), 11663. https://doi.org/10.3390/su132111663
Luria, G., Kahana, A., Goldenberg, J., & Noam, Y. (2019). Leadership Development: Leadership Emergence to Leadership Effectiveness. Small Group Research, 50(5), 571–592. https://doi.org/10.1177/1046496419865326
Martens, W., & Bui, C. N. M. (2023). An Exploration of Legitimacy Theory in Accounting Literature. OALib, 10(01), 1–20. https://doi.org/10.4236/oalib.1109713
Oehoedoe, M. S., Minanurohman, A., & Fitriani, N. (2023). CEOs Accounting Background and ESG Disclosure: Empirical Evidence of Indonesian Listed Companies. Jurnal Dinamika Akuntansi Dan Bisnis, 10(1), 81–98. https://doi.org/10.24815/jdab.v10i1.28558
Osei Bonsu, C., Liu, C., & Yawson, A. (2024). The Impact of CEO Attributes on Corporate Decision-Making and Outcomes: A Review and an Agenda for Future Research. International Journal of Managerial Finance, 20(2), 503–545. https://doi.org/10.1108/IJMF-02-2023-0092
Oware, K. M., & Awunyo‐Vitor, D. (2021). CEO Characteristics and Environmental Disclosure of Listed Firms in an Emerging Economy: Does Sustainability Reporting Format Matter? Business Strategy & Development, 4(4), 399–410. https://doi.org/10.1002/bsd2.166
Oyinlola, B. (2025). Do CEO and Board Characteristics Matter in the ESG Performance of Their Firms? Corporate Governance: The International Journal of Business in Society, 25(8), 21–39. https://doi.org/10.1108/CG-01-2024-0052
Parguel, B., Benoît-Moreau, F., & Larceneux, F. (2011). How Sustainability Ratings Might Deter ‘Greenwashing’: A Closer Look at Ethical Corporate Communication. Journal of Business Ethics, 102(1), 15–28. https://doi.org/10.1007/s10551-011-0901-2
Qaderi, S. A., Ghaleb, B. A., Qasem, A., & Wan-Hussin, W. N. (2024). Unveiling the Link between Female Directors’ Attributes, Ownership Concentration, and Integrated Reporting Strategy in Malaysia. Borsa Istanbul Review, 24(5), 1031–1045. https://doi.org/10.1016/j.bir.2024.05.012
Romano, M., Cirillo, A., Favino, C., & Netti, A. (2020). ESG (Environmental, Social and Governance) Performance and Board Gender Diversity: The Moderating Role of CEO Duality. Sustainability, 12(21), 9298. https://doi.org/10.3390/su12219298
Sørensen, P., & Lindholst, A. C. (2024). Does Long-Term Management Education Change Behaviors? A Study of Change in Self-Perceived Leadership Behaviors among Participants in a Three-Year Danish Diploma Program. International Journal of Public Sector Management. https://doi.org/10.1108/IJPSM-05-2023-0167
Tjahjadi, B., Soewarno, N., & Mustikaningtiyas, F. (2021). Good Corporate Governance and Corporate Sustainability Performance in Indonesia: A Triple Bottom Line Approach. Heliyon, 7(3), e06453. https://doi.org/10.1016/j.heliyon.2021.e06453
Tumiwa, R. A. F., & Mamuaya, N. C. (2018). The Influence of Managerial Ownership and Institutional Ownership on Agency Costs (Studies on Manufacturing Companies in The Basic Industrial and Chemical Sectors Listed on The Indonesia Stock Exchange). International Journal of Applied Business and International Management, 3(1), 65–74. https://doi.org/10.32535/ijabim.v3i1.78
Urquhart, A., & Zhang, H. (2022). PhD CEOs and Firm Performance. European Financial Management, 28(2), 433–481. https://doi.org/10.1111/eufm.12316
Yin, C., Li, D., & Salmador, M. P. (2022). Institutional Change of Compensation Policy and Its Impact on CEO Turnover and Firm Performance. Review of Managerial Science, 16(8), 2527–2552. https://doi.org/10.1007/s11846-021-00507-3
Yuan, Y., Tian, G., Lu, L. Y., & Yu, Y. (2019). CEO Ability and Corporate Social Responsibility. Journal of Business Ethics, 157(2), 391–411. https://doi.org/10.1007/s10551-017-3622-3
Zahid, R. M. A., Khan, M. K., Maqsood, U. S., & Nazir, M. (2024). Environmental, Social, and Governance Performance Analysis of Financially Constrained Firms: Does Executives’ Managerial Ability make a Difference? Managerial and Decision Economics, 45(5), 2751–2766. https://doi.org/10.1002/mde.4161
Zhan, S. (2023). ESG and Corporate Performance: A Review. SHS Web of Conferences, 169, 01064. https://doi.org/10.1051/shsconf/202316901064
Zhang, M., & Huang, Z. (2024). The Impact of Digital Transformation on ESG Performance: The Role of Supply Chain Resilience. Sustainability, 16(17), 7621. https://doi.org/10.3390/su16177621
Zhang, Q., Loh, L., & Wu, W. (2020). How do Environmental, Social and Governance Initiatives Affect Innovative Performance for Corporate Sustainability? Sustainability, 12(8), 3380. https://doi.org/10.3390/su12083380
Copyright (c) 2026 Jurnal Economia
This work is licensed under a Creative Commons Attribution 4.0 International License.
