The Presence of a Chief Marketing Officer and Management Revenue Forecasts

Abstract

We examine the role of the chief marketing officer (CMO) in corporate voluntary disclosures. Using a sample of S&P 1500 firms for the period from 2003 to 2011, we find that a CMO’s presence in top management is positively associated with the likelihood and frequency of a firm’s issuing management revenue forecasts. We also find that the firms that have a CMO in top management provide more accurate revenue forecasts than those that do not. We show that (1) change analyses and (2) adjustments for endogeneity from a self-selection bias using a Heckman approach yield a consistent inference about the impact of the presence of a CMO on both the quantity and quality of management revenue forecasts. Overall, we show that CMOs significantly contribute to firms’ voluntary disclosures of future performance.

Keywords: Voluntary disclosure; Management revenue forecasts; Chief marketing officers; Management earnings forecasts; Informational role of marketing officers

JEL Classification: M41; M31