麻豆淫院

If the CEO of Astronomer had overseen tax fraud instead of being caught on a kiss cam cuddling his HR chief in an extramarital affair, he might still have a job. That's because, according to a new study, CEOs are five times more likely to be fired for personal misconduct than for overseeing financial fraud.

"For financial fraud, the CEO can easily say, 'Hey, it wasn't me,'" said Aaron Hill, Ph.D., an associate professor in the University of Florida Warrington College of Business who led the study. "With personal misconduct, there's no excuse."

The research, forthcoming in Strategic Organization, examined 59 cases of personal misconduct and compared them with more than 300 financial scandals at publicly traded companies between 1997 and 2020. The personal cases included inappropriate relationships, drug or alcohol incidents, domestic violence, falsifying credentials and derogatory speech.

Hill and his colleagues found that boards move decisively when a CEO's private behavior becomes public. By contrast, financial misconduct鈥攕uch as accounting restatements that can wipe out billions in shareholder value鈥攐ften leaves room for a chief executive to deflect blame onto others in the organization.

Recent company performance influenced how boards responded, to a point. A CEO whose company was thriving could often survive a financial scandal because directors had both plausible deniability and a strong incentive not to disrupt success. But good numbers offered little protection when the problem was personal behavior.

For example, McDonald's ousted Steve Easterbrook in 2019 over a consensual relationship with a subordinate, even though the company's stock price had doubled under his leadership. Hewlett-Packard similarly dismissed CEO Mark Hurd after harassment allegations despite his reputation for turning the firm around.

"Even strong performance can't erase certain kinds of misconduct," Hill said. "There are some things you just can't excuse."

The study also uncovered how scandals influenced succession decisions. When personal misconduct led to a firing, boards were more likely to promote an insider, signaling that the problem lay with one person rather than the culture of the company. Financial scandals, on the other hand, often prompted boards to recruit outsiders as a way of reassuring markets that the firm was serious about change.

"It's a signaling move," Hill said. "Bring in an outsider after fraud, and the market reacts positively. Stick with an insider after a personal scandal, and it says the organization itself is sound."

The researchers argue that these choices reveal how boards balance their fiduciary duty with the reputational risks of scandal. While dismissing a CEO can serve as a public relations reset, Hill emphasized that it is almost always a financially motivated calculation.

"Boards are supposed to look out for the company and its shareholders," he said. "But when they decide to keep a CEO after misconduct, I think it sends the wrong message鈥攖o employees, to investors and to the public."