Does a CEO's private reputation impede corporate governance?

Guang Yang, Ruixian Huang*, Yukun Shi, Zhehao Jia

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

The CEO's reputation is a valuable intangible resource for a firm. This study investigates the effect of a CEO's reputation on corporate governance efficiency. Using a sample of 3504 Chinese listed companies from 2002 to 2018, we find that the CEO's reputation built through corporate donations reduces the probability of their forced turnover. This effect is stronger when a firm/CEO has more media exposure and weaker when a firm's peer companies donate more. The mechanism of this effect is that the CEO's reputation is a valuable resource that makes it difficult for firms to find a substitute in a short time; therefore, firing a CEO who has a high reputation is costly to a firm, and reputable CEOs are likely to become entrenched. Our study demonstrates a new perspective on the CEO's reputation by explaining the failure of corporate governance and provides practical insights for constraining managers and promoting the management efficiency of enterprises.
Original languageEnglish
Article number105640
Number of pages17
JournalEconomic Modelling
Early online date4 Sept 2021
Publication statusPublished - Nov 2021

Keywords / Materials (for Non-textual outputs)

  • CEO private reputation
  • corporate donation
  • CEO forced turnover
  • media expsosure


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