Executive power discrepancy and corporate ESG greenwashing

Abstract

Originating from the theory of organizational hierarchy, the concept of power discrepancy among corporate executives has garnered scholarly attention due to its roots in the unequal distribution of authority and influence within the upper echelons of management. This paper explores the realm of corporate ESG greenwashing, a deceptive practice masking genuine environmental, social, and governance responsibilities, and empirically investigates the influence of executive power discrepancies on such practices. Findings indicate a direct correlation between increased executive power discrepancies and a heightened propensity towards ESG greenwashing. Furthermore, the impact of this discrepancy is notably more pronounced in non-state-owned entities, corporations operating in highly marketized regions, and those with substantial financing constraints. This study contributes to the nuanced understanding of how disparities in executive power shape corporate ESG conduct, enriches the discourse on corporate governance structures, and fosters the evolution of theories related to internal governance and social accountability, offering vital practical insights.