We investigate whether CEOs are more likely to be replaced position following incidences related to Environmental, Social, and Governance (ESG) events. Utilizing a sample of large European firms, which allows us to consider covariates at individual-, firm-, industry-, and country-levels, we find that ESG-related news has a statistically and economically significant and robust impact on CEO turnover. The impact is proportional to the severity of an event. Consistent with prior literature, we find some evidence that common-law countries rely more on market-based (ex post) penalties to CEOs to deter stakeholder-related ESG misconduct than civil-law countries.
Colak, G., Korkeamaki, T., & Meyer, N. (2020). ESG and CEO Turnover. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3710538