Predicting corporate management performance using AI: Incorporating CEO strategy insights from sustainable management reports

Abstract

This study proposes an AI-based model to predict corporate management performance by combining financial data with strategic information extracted from CEO messages in sustainability reports. Using a dataset of 1,271 listed companies on Korea’s KOSPI and KOSDAQ markets (2016–2023), we applied eight machine learning and deep learning classifiers: KNN, SVM, GBM, CatBoost, GAN, RNN, LSTM, and Transformer. Financial variables were selected based on prior accounting research, while strategic variables were derived via text mining of CEO messages and categorized using the Sustainable Balanced Scorecard (SBSC) framework. Results show that models incorporating both financial and strategy-based variables outperformed those using financial data alone. Notably, the Transformer model achieved the highest predictive accuracy, followed by LSTM and RNN. These findings provide actionable insights for investors and corporate stakeholders while advancing interdisciplinary research between accounting and AI. Under 5-fold cross-validation, the best-performing hybrid model (Transformer with SBSC features) achieved Accuracy = 0.8467, AUC = 0.8481, and F1 = 0.8572, and adding SBSC strategy indicators improved mean performance across models (ΔAccuracy=+0.0121; ΔAUC=+0.0092; ΔF1=+0.0119).