Publication Type

Journal Article

Version

submittedVersion

Publication Date

1-2020

Abstract

Why do some boards refuse to take serious action against CEOs who have committed financial misconduct? Past work has directed attention to the antecedents of misconduct while largely overlooking this question. The relatively few studies to examine it have typically revolved around the capacity of boards to take action, or their relationships to their CEOs. This study instead examines how the beliefs and values held by board members can influence their actions following financial misconduct. Focusing on political ideology, we argue and find that politically conservative boards are more likely to respond by dismissing the CEO than are liberal boards. In addition, we identify two factors that moderate this finding: a firm’s ethical shortfall compare to industry peers and engagement in corporate social responsibility.

Keywords

CEO dismissal, corporate governance, financial misrepresentation, organizational misconduct, political ideology

Discipline

Business Law, Public Responsibility, and Ethics | Corporate Finance | Strategic Management Policy

Research Areas

Strategy and Organisation

Publication

Strategic Management Journal

Volume

41

Issue

1

First Page

108

Last Page

123

ISSN

0143-2095

Identifier

10.1002/smj.3088

Publisher

Wiley: 24 months

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1002/smj.3088

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