Balancing financial performance and sustainability: Examining the influence of CEO busyness on firm performance and ESG intensity

In an era of intensifying regulatory scrutiny and heightened stakeholder expectations for corporate sustainability, effectively navigating both short-term financial imperatives and long-term ESG commitments presents a significant challenge for CEOs. This study examines how CEO busyness, characterized by multiple external directorships that can strain executive attention and complicate resource allocation, affects a firm's ability to manage these competing priorities successfully. Drawing on an integrated framework of resource dependence theory and the attention-based view, and analyzing a sample of Chinese A-share listed firms from 2009 to 2021, the findings reveal a significant trade-off. While CEO busyness is positively associated with subsequent financial performance, it concurrently hinders ESG intensity. These divergent effects are further amplified by short-term debt. Notably, this busyness-driven performance trade-off becomes statistically insignificant in firms holding ISO14001 environmental certification, indicating its potential buffering role. The research offers critical insights for corporate boards and policymakers, underscoring the critical need for governance structures that enable firms to pursue both financial resilience and substantive ESG progress within an increasingly demanding global landscape. • CEO busyness is positively correlated with financial performance. • CEO busyness is negatively correlated with ESG intensity. • Short-term loans amplify these effects on financial performance and ESG intensity. • ISO14001 certification mitigates CEO busyness effects on financial and ESG intensity. • A new ESG metric, validated with emissions data, informs sustainability.