Journal
JOURNAL OF APPLIED PSYCHOLOGY
Volume 102, Issue 4, Pages 617-635Publisher
AMER PSYCHOLOGICAL ASSOC
DOI: 10.1037/apl0000172
Keywords
CEO succession; leader selection; facial appearance; firm misconduct; CEO integrity
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We investigate a particular aspect of CEO successor trustworthiness that may be critically important after a firm has engaged in financial misconduct. Specifically, drawing on prior research that suggests that facial appearance is one critical way in which trustworthiness is signaled, we argue that leaders who convey integrity, a component of trustworthiness, will be more likely to be selected as successors after financial restatement. We predict that such appointments garner more positive reactions by external observers such as investment analysts and the media because these CEOs are perceived as having greater integrity. In an archival study of firms that have announced financial restatements, we find support for our predictions. These findings have implications for research on CEO succession, leadership selection, facial appearance, and firm misconduct.
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