Sustainable supply chain management and CEO compensation: does CSR committee matter?

ABSTRACT

This study extends the existing literature on sustainable supply chain management (SSCM) and executive compensation by focusing on an important part of the company’s value chain, namely its supply chain (SC) and the associated risks. Through a quantitative study of companies listed on the SBF 120 over the period 2007–2021, our results emphasise the role of CSR committee to improve the relationship between the implementation of sustainable SC initiatives and CEO compensation. The CSR committee can be a way to improve the identification and consideration of environmental and social risks linked to the SC. We demonstrate the advantage of the presence of a CSR committee for the CEO themselves by increasing their compensation when they are more engaged in CSR activities. This result adds original insights to the existing literature which has already demonstrated the benefit of this committee for the other stakeholders. Thus, our results encourage the boards to implement this non-binding CSR committee as a supplementary governance mechanism.

KEYWORDS:

• Environmental and social supply chain management
• CEO compensation
• CSR committee
• risk management

Disclosure statement

No potential conflict of interest was reported by the author(s).