Panel analysis reveals that CEO conversational receptiveness reduces corporate ESG controversies in S&P 500 firms, highlighting the protective role of open executive communication.
Environmental, social, and governance (ESG) controversies can severely damage firms' legitimacy, reputation, and stakeholder trust. Yet little is known about how CEO leadership behaviors shape firms' exposure to such unfavorable ESG outcomes. Drawing on Information Processing Theory, we examine whether CEO conversational receptiveness, the extent to which CEOs signal willingness to engage with opposing views, is associated with fewer ESG controversies. We argue that conversationally receptive CEOs may facilitate earlier detection of ESG risks, more constructive resolution of emerging issues, and a more open communication climate within the firm. Using multi‐source panel data from 463 S&P 500 firms between 2006 and 2021 (4614 firm‐year observations), we find that CEO conversational receptiveness is negatively associated with ESG controversies. Moreover, this relationship is strengthened when firms possess higher financial slack and larger boards. By extending conversational receptiveness to the organizational level and identifying governance conditions under which it is most effective, we contribute to receptiveness literature and ESG risk mitigation.
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Hufnagel et al. (2026) studied this question.
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