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Beauty and Appearance in Corporate Director Elections

25 Pages Posted: 18 Oct 2017 Last revised: 9 Nov 2017

Philipp Geiler

EMLYON Business School

Luc Renneboog

Tilburg University - Department of Finance; European Corporate Governance Institute (ECGI); Tilburg Law and Economics Center (TILEC)

Yang Zhao

Newcastle University

Date Written: November 1, 2017

Abstract

We study the role of facial appearance in corporate director (re-)elections by means of director photographs published in annual reports. We find that shareholders use inferences from facial appearance in corporate elections, as a better (higher rated) appearance measure of a director reduces voting dissent. These heuristics are based on perceived competence, trustworthiness, likability, and intelligence, but not on physical beauty. The results are valid for director re-elections but not for first appointment elections as in the latter cases, shareholders may not as yet be familiar with a director’s looks. In firms with few institutional shareholders and more retail investors owning small equity stakes, the latter tend to rely more on facial appearance than institutional shareholders, presumably as institutions conduct more research on the director’s background and performance, and consequently rely less on facial appearance. While female directors generally experience lower voting dissent, their facial appearance does not affect corporate voting outcomes.

Keywords: Appearance, Beauty, Competence, Corporate Elections, Gender, Behavioral Finance, Annual Meeting, Special Meeting, Extraordinary Meeting

JEL Classification: G34, G39, G41

Suggested Citation

Geiler, Philipp and Renneboog, Luc and Zhao, Yang, Beauty and Appearance in Corporate Director Elections (November 1, 2017). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 537/2017. Available at SSRN: https://ssrn.com/abstract=3054649

Philipp Geiler

EMLYON Business School ( email )

23 Avenue Guy de Collongue
Ecully, 69132
France

Luc Renneboog (Contact Author)

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Warandelaan 2
5000 LE Tilburg
Netherlands
+13 31 466 8210 (Phone)
+13 31 466 2875 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Yang Zhao

Newcastle University ( email )

5 Barrack Road
NEWCASTLE UPON TYNE, NE1 7RU
United Kingdom

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