A recent study published in the Strategic Management Journal demonstrates that the appointment of an immigrant CEO can significantly reduce the occurrence of corporate social irresponsibility (CSI) in their countries of origin. The research, led by Juan Bu, Associate Professor of International Business and Strategy at Indiana University Bloomington, suggests that the personal ties and cultural attachments of immigrant leaders can meaningfully shape how multinational enterprises (MNEs) conduct themselves abroad, particularly in contexts where firms might otherwise engage in questionable practices such as environmental pollution, labour exploitation, or human rights violations.
Previous scholarship has largely explained cross-national differences in CSI by examining macro-level factors such as government regulation, institutional quality, and cultural values. This study, however, adopts a micro-level perspective, investigating whether the characteristics of individual leaders—specifically, their immigrant status—alter the likelihood of corporate misconduct. By redirecting attention from national systems to the personal experiences of CEOs, the research opens a new avenue for understanding how leadership shapes global corporate behaviour.
“CEOs are central drivers of corporate social performance,” Bu notes. “With globalisation and the rising prominence of immigrant leaders—such as Elon Musk at Tesla and Sundar Pichai at Google—it is crucial to understand how their backgrounds influence corporate conduct internationally. Yet until this study, very little was known about the link between immigrant identities and firms’ social practices abroad.” Bu and his co-authors, Stephanie Lu Wang, Yejee Lee, and Dan Li, argue that immigrant CEOs often preserve strong emotional ties, cultural familiarity, and personal networks within their countries of origin. These enduring connections may reduce the willingness of companies to pursue irresponsible practices in those markets, while also lessening negative publicity.
To test these claims, the researchers assembled a dataset covering U.S.-based multinational corporations listed in the S&P 500 between 2007 and 2020. CEO biographical details were gathered from public sources such as Wikipedia and corporate websites. At the same time, information on CSI incidents was drawn from RepRisk, a global database tracking environmental, social, and governance (ESG) risks. Using a robust statistical matching method, the authors compared 76 firms led by immigrant CEOs with 220 similar firms led by non-immigrant CEOs, allowing for a rigorous evaluation of the role of immigrant leadership.
The results were striking. In the four years following the appointment of an immigrant CEO, CSI incidents in the leader’s home country fell by more than half—a 54.25 per cent decline. By contrast, firms without immigrant CEOs recorded a 6.36 per cent increase in incidents during the same period. The effect was particularly pronounced in cases where the CEO had immigrated as an adult, when the company already had a strong sustainability reputation, and when the home country operated with lower levels of press freedom. As co-author Yejee Lee, now Assistant Professor at Auburn University, explains: “The convergence of these factors illustrates how immigrant CEOs can serve as especially powerful agents of restraint in contexts where oversight is weaker and reputational risks are more acute.”
These findings carry important implications for both corporate strategy and public policy. Firms reveal that leadership selection can be a tool for not only financial growth but also for cultivating responsible global practices and managing reputational risks. For governments, the results highlight the importance of transparency and media freedom in curbing corporate misconduct, while also pointing to the role that executives’ personal attachments can play in improving outcomes. As Wang, Associate Professor of International Business and Strategy, observes: “Firms can use these insights to choose leaders who bring both managerial skill and valuable cross-border social capital, while policymakers can create institutional conditions that amplify these positive effects.”
The study ultimately advances a more nuanced understanding of global corporate behaviour by moving beyond structural determinants and focusing on individual agency. As co-author Dan Li, Professor of International Business, stresses, local governments can strengthen executives’ emotional ties to their home societies, thereby helping prevent misconduct before it arises. In Bu’s words: “Our findings show that who leads a multinational company matters—not just for profits, but for its wider footprint in the world. Leadership is not only about strategy and performance; it is also about responsibility and the capacity to influence corporate conduct across borders.”
More information: Juan Bu et al, Not in my homeland: Immigrant CEOs and the geography of corporate social irresponsibility, Strategic Management Journal. DOI: 10.1002/smj.3702
Journal information: Strategic Management Journal Provided by Strategic Management Society