Founder CEOs and ESG in India: Dr. Halil Kiymaz Takes Home the Best Paper Award

Environmental, Social, and Governance (ESG) investing is a pivotal topic in today’s global markets. It’s one that Dr. Halil Kiymaz knows intimately. A member of Crummer’s faculty since 2004, Dr. Kiymaz now serves as the Bank of America Professor of Finance. He became particularly interested in the relationship between founder CEOs in India and the ESG performance of their companies.

Dr. Kiymaz, together with Woo Sung Kim, completed a study of this topic: Founder CEOs and ESG (Environment, Social, and Governance) Performance: Evidence from an Emerging Market.” Their research was so significant that it was not only recognized by the Global Business and Technology Association, it was honored with the best paper designation at their annual conference in Prague, Czech Republic.

So what was this research that has gotten so much acclaim?

The objectives for his study were three-fold. First, Dr. Kiymaz wanted to determine if an Indian company’s ESG performance was impacted by whether the CEO was a founder or non-founder. Next, he explored how growth opportunities affected the relationship between founder CEOs and their ESG performance. Lastly, he examined how foreign ownership influenced the relationship between founder CEOs and ESG achievement.

Why did Dr. Kiymaz choose Indian companies for his study?

His initial motivation came from the Harvard Business Review. In 2019, they chose the world’s top ten CEOs with outstanding firm performance, including ESG. Of the companies chosen, three were from India, including Shantanu Narayen, CEO of Adobe, Ajay Banga, CEO of Mastercard, and Satya Nadella, CEO of Microsoft. Dr. Kiymaz also noted how proactive India has been in implementing corporate social responsibility (CSR) initiatives and how leaders of Indian companies value employee motivation and development versus short-term profits, especially in comparison with other economies such as the US and UK.

How was the study set up, and what were the results?

The study investigated the relationship between founder CEOs and ESG performance using Indian companies for a span of six years, from 2010 to 2015. Dr. Kiymaz found that founder CEOs negatively impacted the company’s ESG performance. This negative relationship was even more pronounced for firms with a high growth opportunity. Interestingly, the negative connection was less pronounced for companies with a higher foreign ownership. Finally, the CEO’s management structure was a major factor in determining ESG performance.

The paper is expected to be published in 2024. On his big win, Dr. Kiymaz said, “A paper with a Korean co-author, about Indian firms, receiving an award in Prague, Czechia—this is a true reflection of Crummer’s Global mindset.”

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