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Chief Executive Officer power and Corporate Sexual Orientation Equality

Author

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  • Brodmann, Jennifer
  • Hossain, Ashrafee
  • Masum, Abdullah Al
  • Singhvi, Meghna

Abstract

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.

Suggested Citation

  • Brodmann, Jennifer & Hossain, Ashrafee & Masum, Abdullah Al & Singhvi, Meghna, 2021. "Chief Executive Officer power and Corporate Sexual Orientation Equality," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    • Handle: RePEc:eee:beexfi:v:31:y:2021:i:c:s2214635021000873
    DOI: 10.1016/j.jbef.2021.100543
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    2. Anutchanat Jaroenjitrkam & Sirimon Treepongkaruna & Pornsit Jiraporn, 2022. "Does shareholder litigation risk promote or hinder corporate social responsibility? A quasi‐natural experiment," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(3), pages 657-674, May.
    3. Hasan, Mostafa Monzur & Cheung, Adrian (Wai Kong) & Marwick, Trevor, 2022. "Corporate sexual orientation equality policies and the cost of equity capital," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
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    5. Hossain, Ashrafee T. & Masum, Abdullah-Al & Xu, Jian, 2023. "COVID-19, a blessing in disguise for the Tech sector: Evidence from stock price crash risk," Research in International Business and Finance, Elsevier, vol. 65(C).
    6. Chowdhury, Hasibul & Hossain, Ashrafee & Masum, Abdullah-Al & Zheng, Jiayi, 2023. "Does corporate sexual orientation equality affect labor investment efficiency?," Global Finance Journal, Elsevier, vol. 55(C).

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    More about this item

    Keywords

    Corporate Sexual Orientation Equality; CEO power; Corporate governance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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