Strategic leadership and sustainability: The role of CEO and board experience in ESG outcomes in the hospitality and tourism industry

Abstract

The hospitality and tourism (H&T) literature increasingly emphasises sustainable business practices captured through environmental, social, and governance (ESG) performance metrics. Despite this, empirical studies examining the strategic leadership influence at the top of the organisational hierarchy, and specifically, the influence of the board of directors and CEOs on ESG performance within H&T firms, are scarce. Addressing this gap, the current study aims to investigate the role of CEOs’ and board directors’ cross-industry experience through the use of upper echelon theory in influencing ESG performance in the American H&T sector. Data were collected from the ISS, Refinitive, Thomson Reuters, and Compustat databases for publicly traded H&T firms between 2003 and 2021. The study employs the Panel Feasible Generalized Least Squares (PFGLS) method with robustness tests to report the impact of board directors’ and CEO’s cross-industry experience on ESG performance. The results will also indicate whether the board directors’ influence is stronger in any of the sub-sectors of the H&T industry. The study will address an important gap in the literature by providing evidence that board composition plays a critical role in shaping ESG outcomes, thus offering insights for H&T firms and policymakers focusing on sustainable development. The findings will also contribute to an understanding of how governance structures can be designed to advance sustainability goals in H&T firms.