Criminal convictions and risk taking
|Author:||Amir, Eli1; Kallunki, Juha-Pekka2; Nilsson, Henrik3|
1Tel Aviv University and City University of London
2University of Oulu, Department of Accounting
3Stockholm School of Economics
|Online Access:||PDF Full Text (PDF, 0.5 MB)|
|Persistent link:|| http://urn.fi/urn:nbn:fi-fe2021082644457
|Publish Date:|| 2021-08-26
An analysis of a proprietary dataset reveals that non-trivial proportions of directors, Chief Executive Officers (CEOs) and Chief Financial Officers in Swedish listed companies have been convicted or suspected of crimes. Based on prior literature, we argue that directors and senior executives who have been convicted or suspected of crimes are more prone to take risk. Consistent with this argument, we find that firms with more criminally convicted/suspected directors and CEOs report more volatile earnings, engage more in goodwill writeoffs due to more unsuccessful acquisitions, and recognize bad news in earnings in a less timely manner. We also find that these firms are, on average, smaller and less profitable. These findings highlight the role personal characteristics of directors and senior management play in managerial decisions.
Australian journal of management
|Pages:||497 - 523|
|Type of Publication:||
A1 Journal article – refereed
|Field of Science:||
512 Business and management
© 2014 SAGE Publications. The final authenticated version is available online at https://doi.org/10.1177/0312896213513276.