Chief Executive Officer Power and Corporate Sexual Orientation Equality
Journal of Behavioral and Experimental Finance, Volume 31, September 2021,100543.
23 Pages Posted: 15 Jul 2021
Date Written: April 26, 2021
We examine the role of Chief Executive Officer (CEO) power in Corporate Sexual Orientation Equality (CSOE), measured by corporate support for employees with alternate sexual orientations (i.e., Lesbian, Gay, Bisexual, Transgender, and Queer – LGBTQ). We find that CEO power is an obstacle to promoting CSOE. Our finding is robust to different model specifications and a battery of endogeneity checks. In the cross-section, we find that the negative association between CEO power and CSOE is more (less) pronounced for firms with weaker (stronger) external monitoring, with a lower (higher) level of transparency, and those located in a more (less) religious county. We also find evidence that the financial market appreciates it when powerful CEOs are less engaged in possibly controversial promotional activities, such as LGBTQ-friendliness.
Keywords: Corporate sexual orientation equality; CEO power; corporate governance
JEL Classification: G30; G34; J10; M14; M41
Suggested Citation: Suggested Citation