Lawyer CEOs
45 Pages
Posted: 25 Feb 2017
Last revised: 31 Aug 2017
University of Chicago - Law School
Florida State University - College of Business
College of Business, Stony Brook University; School of Economics and Management, Southwest Jiaotong University
Florida State University
Date Written: February 21, 2017
Abstract
We examine the value of CEOs with specialized professional skills by focusing on CEOs with law degrees and their effect on corporate litigation. We find that lawyer CEOs are associated with both lower litigation frequency and less severe litigation. This relation is observed for most of nine types of common corporate litigation. This reduction in litigation is achieved, in part, through a decrease in activities that can lead to litigation, such as earnings management, and an increase in legal oversight by directors with legal expertise. Moreover, CEOs with legal training are associated with higher value in firms with high litigation risk and growth firms.
Keywords: CEOs, litigation risk, corporate finance
Suggested Citation:
Suggested Citation
Henderson, M. Todd and Hutton, Irena and Jiang, Danling and Pierson, Matthew, Lawyer CEOs (February 21, 2017). Available at SSRN: https://ssrn.com/abstract=2923136
