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Do Personal Ethics Influence Corporate Ethics?

50 Pages Posted: 10 Mar 2016 Last revised: 27 Jul 2017

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: July 26, 2017

Abstract

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

Griffin, John M. and Kruger, Samuel A. and Maturana, Gonzalo, Do Personal Ethics Influence Corporate Ethics? (July 26, 2017). 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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