Superstar CEOs and the presentation style of CSR reports: Truthful reflection or impression management?

Abstract

In this study, we investigate A-share listed Chinese firms from 2009 to 2019 to understand the influence superstar chief executive officers (CEOs) on the presentation style of corporate social responsibility (CSR) reports and examine the underlying mechanisms involved. We find that when CEOs are highly regarded as superstars, CSR reports tend to be more comprehensive and vivid. Furthermore, these reports feature a greater prevalence of common words. The gap between CSR reports' presentation style and actual CSR performance suggests that the presentation style of CSR reports is driven more by “impression management” than “truthful reflection.” Moreover, cross-sectional tests reveal that firms with superstar CEOs are more likely to engage in impression management tactics when disclosing their CSR reports, especially in cases that involve frequent negative media coverage, greater managerial power, and noncentral state-owned enterprises (SOEs). Opportunistic CSR disclosures lead to asset mispricing. This study shows the “talking the talk while not walking the walk” phenomenon in the context of CSR. It also provides valuable insights into how investors and regulators can effectively address CSR reports' strategic manipulation.