Components of CEO Transformational Leadership and Corporate Social Responsibility*

TLDR

The study examines how CEOs’ transformational leadership shapes corporate social responsibility and critiques the theory’s emphasis on charismatic leadership. The authors test transformational leadership theory with data from 56 US and Canadian firms. CEO intellectual stimulation is positively linked to strategic CSR, indicating that neglecting leadership yields inaccurate conclusions and prompting a reconceptualization of transformational leadership to emphasize this component.

Abstract

abstract We use transformational leadership theory to explore the role of CEOs in determining the extent to which their firms engage in corporate social responsibility (CSR). We test this theory using data from 56 US and Canadian firms. CEO intellectual stimulation (but not CEO charismatic leadership) is found to be significantly associated with the propensity of the firm to engage in ‘strategic’ CSR, or those CSR activities that are most likely to be related to the firm's corporate and business‐level strategies. Thus, studies that ignore the role of leadership in CSR may yield imprecise conclusions regarding the antecedents and consequences of these activities. We also critique transformational leadership theory, in terms of its overemphasis on charismatic forms of leadership. This leads to a reconceptualization of transformational leadership, which emphasizes the intellectual stimulation component in the context of CSR.