How Does CEO Duality Influence ESG Scores in Hospitality and Tourism Companies? Confounding Roles of Governance Mechanisms and Financial Indicators

Previous studies have yielded inconsistent results about the impact of CEO duality on corporate performance in the hospitality and tourism (H&T) industry. To further delve into this relationship, we investigated the causal relationship between CEO duality and environmental, social, and governance (ESG) performance under various board characteristics and financial indicators. The data from the Thomson Reuters Eikon database were evaluated using a machine learning technique that included targeted maximum likelihood estimation (TMLE), augmented inverse probability weighting (AIPW), and neural network analysis, all of which are doubly robust estimators with cross-fitting. The findings suggest that CEO duality negatively impacts environmental pillar scores but not other outcomes (i.e., governance and social pillar scores). Among the governance practices and financial indicators, policy executive compensation performance, policy executive compensation ESG performance, and return on invested capital (ROIC) have positive relations with total ESG scores. The results have important ramifications for helping H&T companies develop effective boards of directors and governance systems, as well as achieve targeted ESG performance objectives.