Do Personal Ethics Influence Corporate Ethics?

47 Pages Posted: 10 Mar 2016 Last revised: 19 Aug 2016

John M. Griffin

University of Texas at Austin - Department of Finance

Samuel A. Kruger

University of Texas at Austin - Department of Finance

Gonzalo Maturana

Emory University - Goizueta Business School

Date Written: August 18, 2016

Abstract

We introduce a new measure of personal ethics in the form of marital cheating to examine the relationship between personal ethics and corporate misconduct. Firms with CEOs and CFOs who use a marital infidelity website are more than twice as likely to engage in two forms of corporate misconduct. The relationship is not explained by a wide range of regional, firm, and executive characteristics or by the infidelity website usage of other executives. Additionally, white-collar SEC defendants also have elevated levels of infidelity website usage. Our findings suggest that personal and professional ethics are not as distinct as some believe.

Keywords: CEOs, ethics, corporate misconduct, fraud

JEL Classification: G30, M14

Suggested Citation

Griffin, John M. and Kruger, Samuel A. and Maturana, Gonzalo, Do Personal Ethics Influence Corporate Ethics? (August 18, 2016). Available at SSRN: https://ssrn.com/abstract=2745062

John M. Griffin

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-6621 (Phone)

HOME PAGE: http://www.jgriffin.info

Samuel A. Kruger (Contact Author)

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States

Gonzalo Maturana

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

HOME PAGE: http://www.gonzalomaturana.com/

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