Expressed or repressed values? How external governance mechanisms shape the relationship between CSR and TMT pay dispersion

Much of the corporate governance literature examines how various governance mechanisms hold managers accountable for making responsible decisions that are in the best interest of the firm. Principles of fairness and justice¹ are common themes in this literature (West, 2009; Yin et al., 2021), particularly in work related to executive compensation. A key manifestation of these principles is seen in the dispersion of pay among top executives (Aime et al., 2020; Fredrickson et al., 2010). Research suggests that pay dispersion is vital to executives and board members because it shapes perceptions of fairness within the leadership team and throughout the broader organization (Geletkanycz & Sanders, 2012; Jain et al., 2024; Santulli, 2022). Therefore, pay dispersion not only has implications for executive careers and firm performance but also serves as an indicator of an organization’s commitment to justice and fairness (Mannix et al., 1995; Rost & Weibel, 2013).