Do Personal Ethics Influence Corporate Ethics?
50 Pages Posted: 10 Mar 2016 Last revised: 27 Jul 2017
Date Written: July 26, 2017
We introduce usage of a marital infidelity website as a new measure of personal ethics. Financial advisors who engage in professional misconduct and white-collar SEC defendants are twice as likely to use the infidelity website compared to control groups. Companies with CEOs and CFOs who use the website are more than twice as likely to engage in two forms of corporate misconduct. The relation is not explained by a wide range of regional, firm, executive, and cultural variables. These findings suggest that personal and professional ethics are closely connected and strongly related to corporate misconduct.
Keywords: CEOs, CFOs, financial advisors, corporate criminals, ethics, corporate misconduct, fraud
JEL Classification: G30, M14
Suggested Citation: Suggested Citation