Author: Ben Cardwell
Research from the University of Melbourne shows that CEOs that give their time to charities outside of work act with more integrity and efficiency towards their shareholders and are better bosses to their employees.
A team led by Professors Flora Kuang (University of Melbourne and Tilburg University) and Eddy Cardinaels (Tilburg University), together with Dr Jingwen Zhang (Nyenrode Business University), analysed the behaviour of CEOs from 1,500 S&P firms to examine whether exposure to charity work influences executive conduct.
Key findings
Published in Accounting and Business Research, the research showed that CEOs that were involved in charity involvement acted more consistently and ethically in important corporate conduct.
Compared to their peers, the firms of CEOs had:
- 24.8% lower likelihood of financial restatements
- 30.1% reduction in reporting frauds
- Increased average levels of employee satisfaction
“This is a reminder that involvement in charity not only benefits the community, it’s also good business practice,” says Professor Kuang.
Continued benefits
The research found that when CEOs continued with genuine charity work, the firm’s benefits compounded.
“We saw that this effect continues to grow over time, suggesting that the longer a CEO is involved with charity, the more likely it is to impact their behaviour,” says Professor Kuang.
What counts as ‘charitable behaviour?’
To ensure the findings were rigorous, the team of researchers designed a clear definition of what constitutes involvement in a charity. Corporate donations and contributions to non-charitable organisations like industry clubs or professional sporting teams were not classed as charity involvement, but were considered in the study in comparison to the main findings.
Through this stringent classification, it was found that corporate donations and contributions to non-charitable organisations were generally driven by different motivating factors and did not have the same benefits brought by charity involvement.
Motivations and long-term community benefits
The findings also suggested that the benefits are felt no matter the initial motivation from the individual.
“Many people assume that CEOs contribute their time to charity as a marketing ploy, to make them and their organisation look better. What we found is that it doesn’t matter what the initial motivation is, this involvement has a positive impact not just on the charity, but on the CEO, their firm’s stakeholders and employees,” says Professor Kuang.
While a common view in the public, the study suggests that charity involvement is rarely a corporate decision and is most often driven by the pro-social CEOs themselves, who we are more likely to act ethically.
“This idea is entrenched into how businesses operate. Through this study, we also found that firms perceived by the public as lacking in corporate social responsibility are more likely to urgently replace their current CEOs with new leaders known for their charitable involvement, in an effort to improve the culture and integrity of their leadership.”
Cardinaels, E., Kuang, Y. F., & Zhang, J. (2026). CEO charity involvement and corporate performance in promoting stakeholders’ interest. Accounting and Business Research, 56(2), 216–253.
DOI: https://doi.org/10.1080/00014788.2025.2450619
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