Sex, drugs, and . . . financial restatements? Investigating differences in firms’ CEO dismissal and succession actions post-misconduct
研究区分CEO个人不当行为与公司财务不当行为，分析不同类型不当行为如何影响CEO解雇与外部继任决策，并发现公司业绩调节这些关系。
To mitigate the potential adverse effects of corporate misconduct, firms often dismiss the chief executive officer (CEO) and appoint an outsider. Such actions are commonly interpreted as signals of firms’ commitment to reducing the likelihood of future misconduct. However, empirical findings linking misconduct to CEO turnover remain inconsistent. We argue that this inconsistency stems from a general neglect of nuances in both the nature of misconduct and directors’ oversight roles. We theorize that variation in CEO attribution based on misconduct type and firm performance helps explain these dismissal and appointment decisions. We test our arguments by distinguishing between two types of misconduct—CEO personal misconduct, where attribution is higher, and firm-level financial misconduct, where attribution is lower. Analyzing 59 CEO personal misconduct events matched by industry, firm size, and time period to 324 financial misconduct events, we find that these dismissal and appointment decisions are shaped by misconduct type, with firm performance moderating these relationships.