In the last three decades, corporate social responsibility performance (CSRP) and corporate financial performance (CFP) have remained in academic discussion. Especially current digitalization revitalized the discussions (Rauf et al., 2020). CSR is the continuous legal commitment of a corporation toward the community, and there is a direct relationship between meeting CSR activities and shareholder wealth maximization (Safarzad et al., 2016). The primary reason for the CSR initiative by public and private companies is that CSR firms outperform non-CSR firms. However, the problem with CSR reports is that they are subjective and have inherited perceptual biases (Carroll, 1991). The main question in CFP and CSRP debate is whether socially responsible firms report the same financial performance compared to firms not involved in social investments? (Mcwilliams and Siegel, 2001; Choi et al., 2010; Rauf et al., 2020). The literature provides inconclusive evidence; the results of some studies are insignificant, some are negative or neutral (Moore, 2001), and a majority are positive impact studies (Kempf and Osthoff, 2007; Choi et al., 2010).

To be socially responsible and remain financially sustainable are two challenges faced by corporate at the same time. CSR ensures firm performance while protecting the social welfare of stakeholders (Lin et al., 2009), and socially responsible firms attract more investors. In this study, the CFP and CSR relationship was investigated in the presence of CEO turnover, CEO duality, and CEO as CFO. CEO is the leading player and is responsible for planning, organizing, controlling, and evaluating short- and long-term strategies. With CEO turnover or the arrival of new CEO, the overall affairs of the corporation are affected (Murphy and Zimmerman, 1993). How does the Chinese firm feel about this change? We found a significant negative impact of CEO turnover on CFP-CSR. CEO duality and CSR are essential aspects of corporate affairs. CEO duality may lead to concentration of power and less interest in CSR practices because CEO duality enables the CEO to exercise excessive decision-making power (Jensen, 1993). Removal of poor-performing CEO becomes challenging for the board when he holds the position of chairman (Goyal and Park, 2002). It is expected that the CEO duality may bring a problem to the governance and also a negative impact on CSRP. For significant internal control, the role of the CFO in top management is increased. As CEOs and CFO play different roles within corporations, their approach toward CSR is different. Our findings contribute to the existing financial reporting and management literature by measuring the CEO as CFO in the Chinese context. Our findings confirm that holding both positions by CEO increases the CSR performance of Chinese firms.

This study is a tangible contribution to the literature on corporate financial and CSR performance and chief executives' role in this nexus. Previous literature provided inconclusive evidence on the CFP and CSRP relationship. Further, there are studies investigating the direct impact of CEO and CSR performance. To the best of our knowledge, there is no study investigating the moderating role of chief executives in CFP-CSRP nexuses. Therefore, this study fills this gap by investigating how particular characteristics of CEOs (i.e., CEO duality, CEO turnover, and CEO as CFO) influence the CFP-CSRP relationship. CFP performance plays a diverse role in a firm's CSR performance in China, and minimal literature is available on this issue in the Chinese context, especially from the chief executives' perspective. By focusing on the equity market of China, this study is a unique contribution to the existing literature in the following ways. First, most corporations in China are state-owned; the state sets all the relegations as the actual owner. It allows the government to control corporations and set policies in the best interest of the state and all stakeholders. In this unique scenario, the role of chief executives is very important. Like other emerging economies in the world, the Chinese corporations are subjected to following state rules and regulations, dividend disbursements, and maintaining a competitive edge in the equity market. Second, CSR reporting under the article of the Shanghai and Shenzhen Stock exchange memorandum obliged the firm to maintain audited reports on environmental, economic, and social aspects. Third, the moderating role of CEO turnover, CEO duality, and CEO as CFO in CFP and CSRP nexus is rarely examined in the existing literature. Executives play a vital role to settle the conflict between executives and shareholders. That is considered the root cause of agency problems. To better understand this relationship and mitigate its potential impact, we select CEO turnover, CEO duality, and CEO as CFO as moderating variables between the CFP and CSRP. It helped us understand if the CEOs impact the CFP-CSRP nexus.

The rest of the paper is organized as follows: Section two explains various CSR theories. Section three explains the sample and research methodology. Section four is about results and analysis. Section five concludes and adds policy implications for various stakeholders.

Various theories are used in the literature to relate corporate financial and sustainability performance, such as stakeholder theory (Van Der Laan et al., 2008), legitimacy theory (Nicholls, 2010), institutional theory (Collin et al., 2009), and signaling theory (Connelly et al., 2011).

The stakeholder theory is considered the most applied theory because there are wider stakeholders in firms than shareholders and investors (Safarzad et al., 2016). Carroll (1991) identified four parts of CSR that society expects from corporations: economic, legal, ethical, and philanthropic. His emphasis is that all CSR obligations should be achieved logically, first economic, followed by philanthropic. Freeman (2010) examined the relationship between stakeholder theory and CSR. Freeman's theory proposed that a corporation can only achieve sustainable goals by protecting the interest of all its stakeholders. The term stakeholder includes a person or group who has a claim, right, or interest in a corporation and its present, past, and future. Who can be affected is an essential aspect of stakeholder theory. Ultimately, they also affect the corporation's affairs (Clarkson, 1995). The theory explains that responsible corporations toward society have better financial performance (Freeman, 2010). The theory further elaborates on “secondary stakeholder” and its relationship with the corporation. Secondary stakeholder includes community activist, civil society organization, and social moments (Russo and Perrini, 2010). There are discussions and agreements that these stakeholders have no legal claims on corporation affairs, so they should not be treated as stakeholders (Clarkson, 1995; Russo and Perrini, 2010; Khan et al., 2021). According to the legitimacy theory, companies operate under a “social agreement” that strives to win and maintain social recognition that supports understanding the need for businesses to produce sustainability reporting practices that attempt to defend the legality of their operations. The legitimacy method explains why sustainability reporting has become a “moral” need (Nicholls, 2010; Khan et al., 2022).

The stakeholder theory, which is particularly valuable for justifying and assessing the causes of non-financial reporting's sustainability, is inextricably tied to the legitimacy theory. The stakeholder theory explains how a business interacts with external and internal stakeholders. It shows why stakeholders' information requirements for sustainability reporting entail a multidimensional display of economic, social, and environmental potential. According to the stakeholder theory, these implications can be evaluated in three ways: first, the descriptive element, which assesses a firm's reporting behavior while taking into consideration the competing interests of the organization and its stakeholders. Second, there is the operational side, which is concerned with achieving organizational goals and presenting those accomplishments through reporting. Third, the normative aspect aids in analyzing conformance with norms and rules based on moral principles, given that stakeholders have the power to affect the business and contribute significant value to the organization. It also includes rules and recommendations, bringing the stakeholder theory closer to the normative accounting theory (Donaldson and Preston, 1995).

The institutional theory examines the institutionalization of social characteristics and can be used to understand better how a business entity interacts with its stakeholders. According to institutional theory, organizations are influenced by their institutional surroundings, consisting of socially constructed norms and rationales. These laws govern organizational behavior and activities. As a result, the idea raises awareness of a new institutional space, implying that socially responsible firms must consider economic, environmental, and social factors (Collin et al., 2009). Non-financial reporting also reflects the need to reduce information asymmetry between internal and external stakeholders. The construction of an “information bridge” between stakeholders is the core concept of the signaling theory.

We conclude the discussion of CSR theories with the idea that all of them aid in a better understanding of non-financial reporting's evolution to assuage concerns about managers abusing their information advantage. Further, all theories stress the financial obligation of corporations to perform their operation legally, economically, and philanthropically. Complete transparency from all stakeholders must be required on the implementation side. Lack of transparency is the leading cause of exploitation and further leads to the agent principle problem or agency theory proposed by Jensen and Meckling (1976). All socially responsible enterprise model participants should benefit from managerial “information signals.” This essential premise explains the scope of sustainability reporting. Finally, these theories will serve as a theoretical foundation for understanding CSR and corporate performance literature. The theories claim, in particular, that adopting social and environmental practices allows businesses to save money on production expenses by lowering environmental hazards while simultaneously enhancing relationships with key stakeholders. It will help the company gain a competitive advantage and, as a result, improve its long-term financial success.

The study aimed to examine the association between CFP and CSRP with the CEO's role as moderator. Notably, we answered four questions to validate the stakeholder theory in the context of the listed Chinese firms and want to answer whether CFP is responsible for CSR practices or it is just a belief that all those firms who work for the interest of all stakeholders are more profitable as compared to those that work only for stockholders wealth maximization. The second question is, how does executive turnover play a role in slowing down CFP if any? Furthermore, was CSR activities remain regular with the arrival or departure of the CEO? Third, the chairman works as a bridge between the corporate board and shareholders. Shouldering this task by CEO will have any significance for Chinese corporations, or separation will be the ideal scenario? Forth, CFO is responsible for controlling, evaluating, and reporting the financial results mainly to CEO and external institutional investors. If the CEO also performs this role, what are the possible implications for Chinese corporations? Using the sysGMM, the results contribute in the following ways. Return on Assets (Historical CFP) has a significant negative impact and Tobin's Q (market-based CFP) has a significant positive impact on CSRP. CEO turnover and CEO duality negatively moderate the CFP-CSRP relationship, while CEO as CFO positively moderates this relationship. Findings have substantial implications for all stakeholders, including shareholders, CEOs, corporate regulators, and policymakers.

Our study has many policy implications. First, firms that engage in CSR initiatives outperform their rivals financially. It is an encouraging sign that firm spending on CSR yields excess returns on average. CSR initiatives, on one side, reflect the strong corporate governance practices as the top level is involved. Thus, the execution of the CSR plan is treated as an investment decision with upfront cash outflow for long-term returns. The Chinese firms are politically embedded. The results are very encouraging for policymakers such as investors, corporate practitioners, and local government as normative and progressive values can be met with socially responsible operations. CEO turnover negatively affects CSRP in the Chinese context. CEO is the leading player in corporate affairs, and his departure causes problems for the firm to sustain its operations. This study's findings provide managers with helpful information for improving organizational performance while also taking into account executives' traits as factors that motivate businesses to report on CSR. Policies should be devised to restrict the executives' turnover and dual roles, while executives with specific attributes, such as CFO, should be given preference.

This study, along with policy implications, has some limitations. First, CSR performance is a significant source of a harmonious society in China. Second, the results reflect one country and attribute a single country's political system. Third, a comparative study may be carried out to look at the variations of CFP, CSRP, ET, CEO-duality, and CEO-CFO nexus between different institutions. Fourth, various aspects of CSRP include a disclosure about the customer and lower staff protections that can be examined in future research.

The original contributions presented in the study are included in the article/supplementary materials, further inquiries can be directed to the corresponding author.

RZ: conceptualization, methodology, formal analysis, writing, and editing. WK: data curation, formal analysis, writing, review, and editing. MK: review, editing, resources, and supervision. All authors contributed to the article and approved the submitted version.

This research was supported by the 2022 Scientific Research Fund of Yunnan Province education department (2022J1245).

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.