Personal infidelity and professional conduct in 4 settings

Abstract

We study the connection between personal and professional behavior by introducing usage of a marital infidelity website as a measure of personal conduct. Police officers and financial advisors who use the infidelity website are significantly more likely to engage in professional misconduct. Results are similar for US Securities and Exchange Commission (SEC) defendants accused of white-collar crimes, and companies with chief executive officers (CEOs) or chief financial officers (CFOs) who use the website are more than twice as likely to engage in corporate misconduct. The relation is not explained by a wide range of regional, firm, executive, and cultural variables. These findings suggest that personal and workplace behavior are closely related.

CFO Effort and Public Firms' Financial Information Environment*

“…Whether a manager holds an aircraft pilot license is used to capture the manager's risk preference (Cain and McKeon 2016; Sunder et al 2017), and a manager's prior legal infractions are used to capture the manager's integrity (Davidson et al 2015; Cline et al 2018). Similarly, Griffin et al (2019) use managers' use of the marital cheating website Ashley Madison to examine their personal ethics . Several studies use managers' option holding behavior (i.e., how long a manager holds in‐the‐money options) to capture managerial overconfidence (e.g., Malmendier and Tate 2005, 2008; Galasso and Simcoe 2011; Hirshleifer et al 2012; Schrand and Zechman 2012; Ahmed and Duellman 2013; Hribar and Yang 2016; Moon 2020).…”

“…For example, Sunder et al (2017) predict and find that firms led by sensation‐seeking CEOs (i.e., those who enjoy risk taking and pursue novel experiences) generate greater innovation outcomes. Prior studies that examine firms led by managers with legal infractions (Davidson et al 2015) or marital infidelity (Griffin et al 2019) find that these managers are more likely to engage in corporate misconduct such as fraudulent reporting and financial misstatement. Finally, Cronqvist and Yu (2017) find a positive relation between CEOs who are parenting a daughter and their firms' corporate social responsibility activities.…”

“…For example, Cain and McKeon (2016) use the Federal Aviation Administration's Airman Certification database to search for pilot CEOs and find only 179 pilot CEOs. Griffin et al (2019) use the Ashley Madison data to search for managers who engaged in marital infidelity and identify only 47 CEOs, 48 CFOs, and 159 other managers. Therefore, limited generalizability is a challenge within this literature.…”

Criminals, bankruptcy, and cost of debt

“…Another strand of this literature examines professional services companies for which researchers can obtain sufficiently detailed data and in which the outcomes of the single employee are traceable (Amir et al 2014a;Law and Mills 2019;Griffin et al 2019). This stream documents that the traits of each employee are associated with that employee's decisions.…”

Professional Ethics in Accounting as Assessed by Managers of Economic Units

“…In recent years, due to the interest sparked by the #MeToo movement, even the issues of marital fidelity and, more broadly, personal conduct in the context of professional misconduct cases among people responsible for finance and accounting in their entities have become the subject of research (Griffin, Kruger and Maturana, 2019). A two-way influence between professional conduct and personal conduct (or misconduct) makes ethical issues in finance and accounting even more complicated.…”