Does Chief Executive Officer Power Change the Impact of Sustainable Development Information Disclosure on Financial Performance?

Background: The disclosure of information on sustainable development is an issue that has garnered the attention of researchers and is a concern to society. Therefore, research on this issue is a crucial area of inquiry. Objective: The study aimed to assess the influence of sustainable development information disclosure (SDID) on economic performance and to investigate whether chief executive officers (CEOs) modify the impact of sustainability disclosure on financial performance (FP) in an emerging economy. Methodology: This research utilised a dataset compiled from annual reports and financial statements of 311 listed firms on the HCMC Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX) for the period 2020-2023. The Pooled OLS model was employed after performing a regression analysis using 2SLS to address the endogeneity problem and test the hypotheses proposed in the study. Result: The study found no evidence of the effect of SDID on financial performance, as measured by ROA. However, when CEOs have expertise in finance and accounting, sustainable development information increases financial performance. Conclusion: The results indicate that CEOs with strong knowledge and skills in finance and accounting play a significant role in enhancing the positive impact of sustainability disclosure on financial performance. Unique contributions: This study represents an initial investigation in Vietnam to assess the influence of SDID on financial performance, with CEO power acting as a moderating variable in this relationship. It contributes to the existing foundational theory on the important role of CEO power in enhancing SDID while improving financial results in an emerging economy. Key Recommendations: Future studies should further assess the impact of factors related to climate change, carbon emissions, political institutions, and other CEO characteristics on sustainability disclosure and financial performance to explore this issue in more detail.