Abstract
Abstract We examine the impact of CEOs’ inherited altruistic inclination on firm corporate social responsibility (CSR) performance and shareholder returns. Specifically, we look at U.S. CEOs’ altruism as an inherited value of the CEOs’ ancestral cultural origin that shapes their moral behavior and influences firm commitment to altruistic and genuine CSR. We find that firms led by CEOs with stronger inherited altruistic preferences have better CSR performance after controlling for firm financial and corporate governance attributes and other leadership characteristics. The impact of CEO inherited altruism on CSR is higher when CEOs operate under lower cash flow pressure. Consistent with a view of ethical leadership which protects the interests of both stakeholders and shareholders, we find that CEOs who inherit altruistic preferences are not significantly associated with firms’ stock returns under normal circumstances, while they protect shareholder returns during times of financial crisis and recessions. The results survive several robustness and endogeneity checks.