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J Appl Psychol. 2017 Apr;102(4):617-635. doi: 10.1037/apl0000172. Epub 2016 Dec 19.

The role of facial appearance on CEO selection after firm misconduct.

Author information

1
Department of Management and Organization.
2
School of Business Administration, University of California, Riverside.
3
School of Business, George Washington University.
4
Foster School of Business, University of Washington.

Abstract

[Correction Notice: An Erratum for this article was reported in Vol 102(4) of Journal of Applied Psychology (see record 2017-10684-001). The wrong figure files were used. All versions of this article have been corrected.] We investigate a particular aspect of CEO successor trustworthiness that may be critically important after a firm has engaged in financial misconduct. Specifically, drawing on prior research that suggests that facial appearance is one critical way in which trustworthiness is signaled, we argue that leaders who convey integrity, a component of trustworthiness, will be more likely to be selected as successors after financial restatement. We predict that such appointments garner more positive reactions by external observers such as investment analysts and the media because these CEOs are perceived as having greater integrity. In an archival study of firms that have announced financial restatements, we find support for our predictions. These findings have implications for research on CEO succession, leadership selection, facial appearance, and firm misconduct. (PsycINFO Database Record.

PMID:
27991800
DOI:
10.1037/apl0000172
[Indexed for MEDLINE]

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