Abstract:
Why do some firms become frequently subject to corporate discrimination lawsuits, while others do not? We argue that the values of corporate leaders play a key role. Drawing on strategic leadership theory and research on political psychology, we argue that conservative CEOs – who typically embrace less egalitarian values in their approach to strategic leadership – are prone to have a higher number of corporate discrimination lawsuits filed against their firm. We also hypothesize that the relationship between CEO conservativism and corporate discrimination lawsuits attenuates when the board of directors is more liberal in ideology. Data from S&P 500 firms support our predictions. Supplementary analysis also shows that conservative leaders are less likely to learn from corrective feedback and prevent their recurrence. Overall, our research reveals that, in an era where organizations strive to realize value from diversity, the CEO-board ideology interface plays a key role in affecting corporate social outcomes. We discuss some alternative interpretations of our findings and avenues for future research.
Short Bio:
Dr. Peder Greve is Assistant Professor in International Business at Henley Business School - University of Reading, UK and affiliated with the John H. Dunning Centre. He graduated with a PhD in International Management from the University of St Gallen in 2009. Peder has taught at universities in nine countries across Europe, Africa and North America. His research interests are in the strategic leadership of multinational enterprises, particularly focusing on the internationalisation of executive teams and the influence of diversity in top management teams and boards on corporate strategies and performance. His most recent research has been published in Journal of World Business, Leadership Quarterly, and International Journal of Human Resource Management.