A Changing of the Guard: Executive and Director Turnover following Corporate Financial Restatements

Using event history analysis, we found that CEOs and CFOs of firms filing a material financial restatement were more than twice as likely to exit their firms as their counterparts in a matched sample. Directors and audit committee members were approximately 70 percent more likely to exit in restatem...

Full description

Saved in:
Bibliographic Details
Published inAcademy of Management journal Vol. 49; no. 6; pp. 1119 - 1136
Main Authors Arthaud-Day, Marne L., Certo, S. Trevis, Dalton, Catherine M., Dalton, Dan R.
Format Journal Article
LanguageEnglish
Published Briarcliff Manor Academy of Management 01.12.2006
Subjects
Accountability
Audit committees
Bankruptcy
Business management
Business structures
Business studies
Chief executive officers
Chief financial officers
Corporate governance
Corporate strategies
Economic performance
Employee turnover
Enterprises
Financial management
Financial restatements
Labour turnover
Legitimacy
Modeling
Organization theory
Organizational behavior
Outside directors
Stock markets
Studies
Online AccessGet full text

Cover

More Information
Summary:Using event history analysis, we found that CEOs and CFOs of firms filing a material financial restatement were more than twice as likely to exit their firms as their counterparts in a matched sample. Directors and audit committee members were approximately 70 percent more likely to exit in restatement firms. The magnitude, ubiquity, and temporal proximity of executive and director turnover following a restatement indicate that such events pose a serious threat to organizational legitimacy, independent of firm performance. Restatements therefore provide an important and unique context for studying the accountability of strategic leaders for organizational crises.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0001-4273
1948-0989
DOI:10.5465/AMJ.2006.23478165