The Role of the Top Management Team Tenure on Corporate Social Performance and its Impact on Profitability

Bain, Bradley Peter Stewart
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University of Guelph

Companies are now expected to account for more stakeholders than just their shareholders in their strategic decisions. Literature points to a positive correlation between Corporate Social and Financial Performance, yet little attention has been paid to the executives who lead their companies. This research takes a focused look at the tenure of the 2009 top management teams of 98 companies from the Canadian energy, materials, and utilities economic sectors. Regression was used to test hypotheses regarding the impact of Top Management Team tenure on the environmental, society, and governance performance of these firms, and this performance on profitability. Results indicate that for these teams and companies, when controlling for firm age, size, and available slack resources, that tenure did not have a significant relationship to social performance. Moreover, these performances did not predict firm financial performance. The theoretical and managerial implications of the results of this thesis are also discussed.

Corporate Social Performance, Corporate Social Responsibility