Me Too: Does Workplace Sexual Harassment Hurt Firm Value?

Au, Shiu-Yik; Dong, Ming; Tremblay, Andréanne

doi:10.2139/ssrn.3437444

Cited by 5 publications

(8 citation statements)

References 71 publications

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“…Our focus on US firms is strictly motivated by data availability, as other, country-specific career intelligence websites have lesser coverage. We expect our findings to be generalizable to other countries.4 In addition,Au et al (2022) show that the review-based sexual harassment measure contains valid information, as it associates with firm-level abnormal stock returns. The authors also validate their measure against various proxies.…”

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confidence: 59%

“…In addition, workplace sexual harassment leads to significant wealth destruction for shareholders. The involved firms' market value losses range from $450 million over 2 days (Borelli-Kjaer et al, 2021) to an annual loss of $0.8 to $1.4 billion for the average sexual harassment-prone firm (Au et al, 2022). These economically important costs, together with the fact that sexual harassment represents a barrier to women's professional success (McLaughlin et al, 2017), explain why seeking effective strategies to deter workplace sexual harassment should be an important topic on the corporate agenda, and why workplace sexual harassment is a valid proxy of firms' ethical culture.…”

Section: Workplace Sexual Harassment: Prevalence Costs and Firm Perfo...mentioning

confidence: 99%

“…Furthermore, workplace sexual harassment in corporations is also linked to significant market value losses: For instance, Au et al (2022) find that sexual harassment associates with annual losses in shareholder value of $0.8 to $1.4 billion, and Borelli-Kjaer et al (2021) find average losses of $450 million over the 2 days surrounding the announcement of a sexual harassment scandal.…”

Section: Introductionmentioning

confidence: 99%

“…Through its impact on employee turnover and productivity, workplace sexual harassment can ultimately result in reduced economic performance. Au et al (2022) and Borelli-Kjaer et al (2021) find that workplace sexual harassment leads to losses in shareholder value, in both the short and longer terms, while Au et al (2022) also show that workplace sexual harassment impacts firms' return on assets, return on equity, and labor expenses. These documented links between workplace sexual harassment and economic performance explain why curbing workplace sexual harassment should become a prime concern for corporations.…”

Section: Introductionmentioning

confidence: 99%

“…Workplace sexual harassment is a specific, but particularly nefarious, behavior: It has been associated with multiple negative personal and workplace consequences, including increased employee turnover and absenteeism and lower productivity (e.g., McDonald, 2012; Willness et al, 2007). Furthermore, workplace sexual harassment in corporations is also linked to significant market value losses: For instance, Au et al (2022) find that sexual harassment associates with annual losses in shareholder value of $0.8 to $1.4 billion, and Borelli‐Kjaer et al (2021) find average losses of $450 million over the 2 days surrounding the announcement of a sexual harassment scandal.…”

Section: Introductionmentioning

confidence: 99%

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Does board gender diversity reduce workplace sexual harassment?

Tremblay

You

2022

Corporate Governance

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Research Question/IssueWe contrast the predictions of gender socialization theory and “fem‐power washing” (deceptively positioning as a firm promoting female empowerment without any tangible actions) to investigate whether promoting female directors on the board of directors associates with a reduction in the prevalence of firm‐level workplace sexual harassment (SH).Research Findings/InsightsWe estimate the incidence rate of SH through textual analysis of US employees' job reviews published online during the period 2011–2021. We find that an increase of one female director is associated with a 21.81% decrease in workplace SH and that firms with high board gender diversity synchronize the reduction in SH with improved social policies (e.g., policies to better employee relations, health and safety, or diversity challenges). Our results do not support the fem‐power washing theory but rather imply that nominating female directors may have a profound impact on the firm's ethical culture.Theoretical/Academic ImplicationsThis study validates the ethical dimension of corporate governance: Nominating female directors impacts a firm harassment culture and, by extension, a firm's ethical and corporate culture. This study adds to the governance literature that debates the merits of board gender diversity by highlighting an oft‐ignored channel through which board diversity affects firm value: ethics and corporate culture.Practitioner/Policy ImplicationsFor boards of directors, having more female directors can curb workplace SH, a behavior that is associated with a severe and lasting negative effect on firm value. For practitioners, regulators, and the business community, this study reinforces the merits of aiming towards more gender‐balanced boards.

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confidence: 59%

Section: Workplace Sexual Harassment: Prevalence Costs and Firm Perfo...mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Does board gender diversity reduce workplace sexual harassment?

Tremblay

You

2022

Corporate Governance

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The Value of Names - Civil Society, Information, and Governing Multinationals on the Global Periphery

2020

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Civil society is essential to governance, especially where laws and authority are weak. We study how a core strategy of international civil society groups-informing and publicizing human rights abuses-impacts those tied to abuse. Our study focuses on a major trend at the center of on-going international media campaigns: the assassination of civil society activists involved in mining activity. Collecting and coding 20 years of data on assassination events, we use Event Study Methodology to study how publicity of these events impact the asset prices of firms associated with abuse. We show that publicizing abuses has a significant impact on multinationals. Firms associated with an assassination have large, negative abnormal returns following the event. We calculate a median loss in market capitalisation of over 100 million USD, ten days following violence. We highlight the role of media publicity in our results. We show negative returns from assassinations are stronger during periods of low media pressure, versus when they coincide with competing newsworthy events. As well, we argue our results are driven by events where companies are explicitly named in media publicity, using a set of placebo events where no firms were identified by news coverage. Furthermore, we reject that our results are driven by other forms of unrest and conflict. Last, we show activist assassinations are positively related to the royalties paid by firms to domestic governments. * We benefitted greatly from conversations with Daron Acemoglu, Sascha O. Becker, Weijia Li, and Christopher Woodruff. We benefited from participants of the Applied Young Economist Webinar (AYEW), NEUDC, and CSAE-Oxford workshops. We also would like to thank Rony Rodrigo Maximiliano Rodríguez Ramírez and Lucy Valentine for excellent research assistance.

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Stock Market Response to CEO Sexual Misconduct: Evidence from the #MeToo Era

Mooibroek

Verschoor

2021

SSRN Journal

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Me Too: Does Workplace Sexual Harassment Hurt Firm Value?

Cited by 5 publications

References 71 publications

Does board gender diversity reduce workplace sexual harassment?

Does board gender diversity reduce workplace sexual harassment?

The Value of Names - Civil Society, Information, and Governing Multinationals on the Global Periphery

Stock Market Response to CEO Sexual Misconduct: Evidence from the #MeToo Era

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