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Older and Wiser: How CEOs’ Time Perspective Influences Long‐Term Investments in Environmentally Responsible Technologies
Author(s) -
OrtizdeMandojatalia,
Bansal Pratima,
AragónCorrea J. Alberto
Publication year - 2019
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/1467-8551.12287
Subject(s) - perspective (graphical) , corporate governance , sample (material) , compensation (psychology) , test (biology) , executive compensation , term (time) , population , economics , power (physics) , predictive power , business , marketing , finance , social psychology , psychology , sociology , paleontology , chemistry , physics , demography , philosophy , chromatography , quantum mechanics , epistemology , artificial intelligence , computer science , biology
Most theories of corporate governance argue that chief executive officers (CEOs) take less risk as they near the end of their career, and therefore are less likely to make major investments. This prediction is based on decisions related to firm‐specific benefits; however, it may not be generalizable to decisions that involve broad societal goals. In terms of societal investments, CEOs with a longer time perspective may be more likely, rather than less likely, to invest. In this paper, we argue that a CEO's future time perspective is fostered by shorter career horizons, longer tenures, higher organizational ownership and less short‐term compensation. We test these hypotheses on 150 observations from the US investor‐owned electric power generation sector over a three‐year unbalanced sample (64.3% of the population). We applied random‐effects generalized least squares (GLS) estimations to test our hypotheses, and found support for three out of four hypothesized relationships.