IDEAS home Printed from https://ideas.repec.org/a/taf/acctbr/v52y2022i2p150-165.html
   My bibliography  Save this article

Director friendships with the CEO: are they always a threat to director integrity?

Author

Listed:
  • Carolyn Strand Norman
  • Anna M. Rose
  • Jacob M. Rose
  • Joseph C. Ugrin

Abstract

This paper examines the effects of friendships with the CEO on the decisions of directors of non-profit organisations. Participants in the experiment are active non-profit directors. Results indicate that non-profit directors with no corporate director experience manage earnings less for the benefit of a CEO when they are friends of the CEO, relative to when they do not have a friendship with the CEO. Further, disclosure of the friendship does not result in an increased willingness to manage earnings for the benefit of a CEO friend. The results with non-profit directors are entirely opposite to those previously documented for corporate directors (Rose, J., Rose, A., Norman, C., and Mazza, C, 2014. Will disclosure of friendship ties between directors and CEOs yield perverse effects? The Accounting Review, 89 (4), 1545–1563.). Further, we find that non-profit directors who also have corporate director experience are willing to manage earnings more for a CEO who is a friend, relative to a CEO who is not a friend, and disclosure of the friendship results in increased willingness to manage earnings for the CEO.

Suggested Citation

  • Carolyn Strand Norman & Anna M. Rose & Jacob M. Rose & Joseph C. Ugrin, 2022. "Director friendships with the CEO: are they always a threat to director integrity?," Accounting and Business Research, Taylor & Francis Journals, vol. 52(2), pages 150-165, February.
    • Handle: RePEc:taf:acctbr:v:52:y:2022:i:2:p:150-165
    DOI: 10.1080/00014788.2020.1840331
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00014788.2020.1840331
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00014788.2020.1840331?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:acctbr:v:52:y:2022:i:2:p:150-165. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RABR20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.