Chief Executive Officer Power and Corporate Sexual Orientation Equality

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

Brodmann, Jennifer and Hossain, Ashrafee T and Masum, Abdullah Al and Singhvi, Meghna, Chief Executive Officer Power and Corporate Sexual Orientation Equality (April 26, 2021). Journal of Behavioral and Experimental Finance, Volume 31, September 2021,100543., Available at SSRN: https://ssrn.com/abstract=3886063