A groundbreaking study recently published in the Strategic Management Journal reveals a compelling correlation between immigrant CEOs and a significant reduction in corporate social irresponsibility (CSI) within their countries of origin. Spearheaded by Juan Bu, Associate Professor of International Business and Strategy at Indiana University Bloomington, the research challenges former assumptions by shifting focus from broad national factors to the intimate role of individual leadership in global corporate ethics. This study leverages detailed data analysis to illuminate how personal history and transnational ties can profoundly influence multinational enterprises’ behavior on the world stage.
Corporate social irresponsibility, encompassing detrimental practices such as environmental pollution, labor exploitation, and human rights abuses, has long plagued multinational companies. Traditionally, scholars have attributed variations in CSI incidents between countries to macro-level influences like governmental regulations, cultural norms, or economic development stages. Bu and his colleagues, however, offer a micro-level perspective, positing that the identity and background of CEOs themselves could be pivotal. Specifically, the research zeroes in on whether CEOs who are immigrants exhibit different tendencies affecting corporate conduct abroad.
The premise is intuitively compelling: immigrant CEOs maintain personal and professional connections to their homeland, potentially fostering stronger emotional investments and cultural sensitivities toward these regions. These bonds could translate into enhanced vigilance against irresponsible corporate practices within those geographies, as such actions could harm not only the firm’s reputation but also the leader’s personal legacy. This theoretical foundation is particularly pertinent amid rising globalization and diverse leadership profiles in multinational firms, exemplified by high-profile immigrant CEOs like Tesla’s Elon Musk and Alphabet’s Sundar Pichai.
Bu’s team meticulously gathered CEO biographical data for firms listed in the S&P 500 from 2007 to 2020, distinguishing immigrant CEOs from their non-immigrant counterparts. Simultaneously, they utilized RepRisk’s comprehensive ESG risk database to track instances of corporate social irresponsibility, ensuring a robust and objective measure of corporate behavior. By employing advanced statistical matching techniques, the researchers controlled for firm characteristics to isolate the specific effect of leadership origin on CSI outcomes, thereby enhancing the credibility and precision of their findings.
The results are striking and potentially paradigm-shifting. Companies led by immigrant CEOs exhibited a dramatic 54.25% decline in social irresponsibility incidents related to the CEO’s home country within four years following their appointment. In stark contrast, comparable firms with native CEOs saw a 6.36% increase in such incidents during the same timeframe. This stark divergence underscores the tangible impact of immigrant leadership on mitigating harmful corporate conduct with a geographic dimension rooted in personal ties.
Further dissection of the data revealed that adult immigrant CEOs—those who physically relocated as adults rather than being childhood immigrants—had an even more pronounced effect in reducing corporate misconduct. This nuance suggests that deeply embedded adult experiences and firsthand cultural immersion in the homeland may cultivate a heightened sense of accountability and vigilance. Firms boasting high sustainability ratings amplified this effect, implying that existing organizational priorities toward corporate responsibility synergize with immigrant CEOs’ personal motivations to further reduce CSI incidents.
Adding complexity to the findings, the home country’s media environment also influenced outcomes. In countries with lower press freedom, the presence of an immigrant CEO had a more substantial mitigating impact on CSI. This observation hints that where external checks on corporate wrongdoing are weaker, the personal networks and reputational concerns of immigrant leaders become critical safeguards. It underscores a frontier where individual leadership characteristics interact dynamically with institutional structures, influencing global corporate conduct.
These insights carry profound implications for both corporate governance and public policy. From a strategic standpoint, firms seeking to bolster their social responsibility footprint might consider the diverse backgrounds of executive candidates as a strategic asset, particularly when expanding or operating in markets linked to a CEO’s heritage. This targeted leadership selection can be a lever to reduce risks and enhance stakeholder trust simultaneously, blending business imperatives with ethical stewardship.
On the regulatory front, the study underscores the indispensable role of transparency and media freedom in corporate accountability. Governments aiming to curb corporate misconduct need to foster environments where press freedom thrives, enabling external scrutiny that complements companies’ internal controls. Simultaneously, policymakers are encouraged to facilitate opportunities for immigrant executives to sustain strong emotional and professional connections to their home countries, potentially through cultural exchange programs or expatriate networks promoting ethical business conduct.
Moreover, local governmental agencies might explore novel approaches to deepen these emotional ties strategically, recognizing that such connections serve as preventive mechanisms against irresponsible corporate behaviors long before they materialize. Strategic collaboration between political bodies and multinational corporations could pioneer innovative frameworks to harness the social capital immigrant CEOs bring, thereby enhancing public welfare across transnational landscapes.
The broader scholarly contribution of this research lies in its nuanced disaggregation of structural and individual factors shaping multinational enterprises’ global behavior. Where macro explanations like regulation, culture, or national wealth have dominated, this work spotlights the role of individual agency, demonstrating that leadership diversity transcends mere representation—it actively reconfigures corporate footprints worldwide. The research invites further exploration into how other personal traits of executives might similarly influence firm conduct in complex, international settings.
In a world increasingly defined by cross-border business interactions and multicultural leadership, the findings resonate strongly. They suggest that who leads matters not only for traditional metrics like profitability or innovation but holds equal weight in ethical domains with far-reaching societal consequences. This research offers a clarion call for the business community and policymakers alike to reconsider leadership selection and governance through the lens of global social responsibility and personal identity.
Ultimately, as Juan Bu summarises, the company’s global impact is inseparable from the individual at its helm. In the mosaic of contemporary corporate governance, immigrant CEOs emerge as pivotal figures navigating the intersections of identity, ethics, and international business strategy—paving the way for a more responsible and socially attuned multinational corporate paradigm.
Subject of Research: Corporate social irresponsibility and the influence of immigrant CEOs on multinational enterprises’ behavior.
Article Title: Not in my homeland: Immigrant CEOs and the geography of corporate social irresponsibility
News Publication Date: 17-Feb-2025
Web References:
- Study link: https://sms.onlinelibrary.wiley.com/doi/full/10.1002/smj.3702
- Strategic Management Society: https://www.strategicmanagement.net/about-sms/
References:
Bu, J., Wang, S. L., Lee, Y., & Li, D. (2025). Not in my homeland: Immigrant CEOs and the geography of corporate social irresponsibility. Strategic Management Journal. https://doi.org/10.1002/smj.3702
Keywords: Corporations, immigrant CEOs, corporate social irresponsibility, multinational enterprises, leadership impact, ESG risks, globalization, media freedom, corporate governance
