Scheller College of Business, Georgia Tech
When do Appointments of Corporate Sustainability Executives affect Shareholder Value?
This paper investigates the shareholder value effects of appointing corporate sustainability executives (CSEs) to firms’ top management teams. We use event study methodology to estimate the stock market reactions to a sample of 106 announcements of CSE appointments made by publicly listed firms during the period 2000–2015. The evidence suggests that although the stock market reaction to CSE appointments is overall value neutral, the stock market reacts more positively under certain firm-specific factors. The stock market reacts more positively in instances where the announcing firms faced an adverse prior sustainability-related event, and when announcing firms specify focused as opposed to broad responsibilities for the CSE appointee. However, there is no difference in the stock market reactions to announcements of appointments to newly-created versus existing CSE positions, and to announcements of outsider versus insider CSE appointments.
Priyank Arora is a fifth-year doctoral student of operations management at the Scheller College of Business at Georgia Tech (Atlanta, USA). He wishes to contribute to management science by working on research problems, particularly in the field of socially-responsible operations and supply chains. Currently, topics related to non-profit operations (e.g. resource allocation, funding), healthcare operations (e.g. organ donation value chain), and sustainable operations pique his interest. His ongoing research efforts focus on unique challenges and strategies associated with socially-responsible operations and supply chains. Priyank’s teaching interests are in operations/supply chain management concepts and their interrelationships with environmental and societal responsibilities.
He currently teaches the core operations management course in the undergraduate program at the Scheller College of Business. He has completed post-graduation program in management (equivalent to one-year MBA) at Indian School of Business (Hyderabad, India), and holds a Bachelor’s degree in engineering from Delhi University (New Delhi, India).