When Celebrity CEOs Undermine Sustainability Value:  Evidence from Indonesian Firms

Dwi Nova Wijaya; Wendy  Wendy; Helma  Malini

doi:10.14414/jebav.v27i2.4302

Authors

Dwi Nova Wijaya Tanjungpura University, Pontianak, West Kalimantan, Indonesia
Wendy Wendy Tanjungpura University, Pontianak, West Kalimantan, Indonesia
Helma Malini Tanjungpura University, Pontianak, West Kalimantan, Indonesia

DOI:

https://doi.org/10.14414/jebav.v27i2.4302

Keywords:

Firm value, Corporate sustainability, Celebrity CEO

Abstract

This research investigates the moderating effect of celebrity CEOs on the relationship between corporate sustainability and firm value. A quantitative approach was utilized, analyzing data from 51 companies listed on the Indonesia Stock Exchange from 2014 to 2021 using regression analysis. While prior studies have explored the individual effects of either celebrity CEOs or corporate sustainability on firm value, this study addresses a gap by examining the interaction between these factors and its impact on firm value. The results reveal that although both the presence of a celebrity CEO and the implementation of corporate sustainability initiatives can enhance firm value, they do not necessarily create a beneficial synergy. In fact, the presence of a celebrity CEO may diminish the positive effects of corporate sustainability on firm value. These findings provide empirical evidence suggesting that companies should carefully assess the alignment between a CEO’s characteristics and the firm’s sustainability strategies to optimize value creation. The study underscores the importance of selecting a CEO whose attributes align with the company’s long-term sustainability objectives. These insights have practical implications for corporate management in making strategic decisions regarding CEO appointments and the execution of sustainability initiatives.

Author Biographies

Dwi Nova Wijaya, Tanjungpura University, Pontianak, West Kalimantan, Indonesia

Dwi Nova Wijaya is a professional with a Master of Management degree, concentrating in financial management. He is currently pursuing a doctorate in Management Science at Tanjungpura University, Pontianak, West Kalimantan, Indonesia. He has previous experience working in the plantation industry and teaching at Institute of Business and Economics in Pontianak, West Kalimantan, Indonesia. E-mail: dwinovawijayadwi@gmail.com
Wendy Wendy, Tanjungpura University, Pontianak, West Kalimantan, Indonesia

Wendy is an Associate Professor at Faculty of Economics and Business of Tanjungpura University, Pontianak, West Kalimantan, Indonesia. He earned his master’s and doctoral degrees in Behavioral Finance from Gadjah Mada University in Yogyakarta, Indonesia. His research focuses on behavioral finance, investment, and capital markets. In addition to teaching, he is frequently invited as a speaker, external examiner, and guest lecturer at a number of Indonesia’s leading universities, as well as a columnist for a variety of mass media platforms. His address: Faculty of Economics and Business, Tanjungpura University, Jl. Prof. Dr. Hadari Nawawi, Pontianak, West Kalimantan, Indonesia. E-mail: wendy@ekonomi.untan.ac.id
Helma Malini, Tanjungpura University, Pontianak, West Kalimantan, Indonesia

Dr. Helma Malini is a lecturer and researcher at Faculty of Economics and Business of Tanjungpura University, Pontianak, West Kalimantan, Indonesia. She received her doctoral degree from Faculty of Economics and Business of Universiti Malaysia Sarawak. Her research focuses on finance, sustainability and Islamic economics. She has also served as the manager of International Class and International Affairs at Faculty of Economics and Business of Tanjungpura University, as well as a reviewer for Indonesian International Student Mobility Awards (IISMA) and Indonesia Endowment Fund for Education Agency (Lembaga Pengelola Dana Pendidikan, LPDP) scholarships. E-mail: helma.malini@ekonomi.untan.ac.id

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