Attractive CEOs: Let off the Hook or Held to a Higher Standard?

Abstract

It may be unpleasant to think that directors treat CEOs differently based on physical appearance, but this is precisely what happens. In this study, we measure CEO facial attractiveness, which sociologists have identified as an objective means to assess beauty. We develop competing arguments for how boards, following revelation of misconduct, treat CEOs differently based on their attractiveness. Using research on the halo effect, we develop arguments showing that attractiveness dampens the likelihood that a board will fire their CEO for corporate misconduct. Using expectancy violations theory, we develop competing arguments about attractiveness, suggesting that it exacerbates the likelihood that a board will fire their CEO for corporate misconduct. Findings support the latter. In the wake of misconduct, only attractive CEOs lose their job. Results show that, following misconduct, boards are far more likely to replace a CEO that scores above average on attractiveness than they are to replace a CEO whose attractiveness score is below average.

Keywords: CEO dismissal, attractiveness, board of directors, expectancy violation theory, organizational misconduct

JEL Classification: M10, M12, M51