Does managerial ability reduce ESG controversies?
1 : The American University of Sharjah
This study examines the impact of managerial ability on firms' ESG (Environmental, Social, and Governance) controversies. Using a panel of US publicly traded firms from 2010-2022, we document that higher managerial ability is associated with fewer ESG controversies. This effect is particularly pronounced in firms with strong external monitoring and in low-polluting industries. These findings highlight managerial ability as a key intangible asset in managing ESG risks and offer actionable insights for boards, investors, and regulators concerned with sustainable corporate governance.

