TY - JOUR

T1 - The reputation costs of executive misconduct accusations

T2 - Evidence from the #MeToo movement

AU - Bouzzine, Yassin Denis

AU - Lueg, Rainer

N1 - Publisher Copyright: © 2022 Elsevier Ltd

PY - 2022/3/1

Y1 - 2022/3/1

N2 - In this study, we examine how sexual harassment accusations against executives affect the stock returns of the affiliated organization. Taking a reputation cost perspective, we identify 98 sexual harassment accusations during 2016–2019, of which 25 directly target organizational executives. We employ an event study methodology to detect abnormal stock reactions for the affiliated organization. The results indicate that #MeToo accusations substantially harmed the stock returns of the organization despite the accusation relating to an individual’s misconduct. We discover significant results only for executives who are employed at the parent organization. Therefore, we first provide evidence that misconduct by individuals matters for organizations. We demonstrate that executive misconduct becomes particularly relevant when the executive assumes a leading position at the parent organization. This finding has important implications for future research and practitioners.

AB - In this study, we examine how sexual harassment accusations against executives affect the stock returns of the affiliated organization. Taking a reputation cost perspective, we identify 98 sexual harassment accusations during 2016–2019, of which 25 directly target organizational executives. We employ an event study methodology to detect abnormal stock reactions for the affiliated organization. The results indicate that #MeToo accusations substantially harmed the stock returns of the organization despite the accusation relating to an individual’s misconduct. We discover significant results only for executives who are employed at the parent organization. Therefore, we first provide evidence that misconduct by individuals matters for organizations. We demonstrate that executive misconduct becomes particularly relevant when the executive assumes a leading position at the parent organization. This finding has important implications for future research and practitioners.

KW - Management studies

KW - #MeToo

KW - Executive misconduct

KW - Sexual harassment accusations

KW - Reputation costs

KW - event study

UR - http://www.scopus.com/inward/record.url?scp=85122999094&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/0078bd77-c395-3314-8d93-c993ddfb48ef/

U2 - 10.1016/j.scaman.2022.101196

DO - 10.1016/j.scaman.2022.101196

M3 - Journal articles

VL - 38

JO - Scandinavian Journal of Management

JF - Scandinavian Journal of Management

SN - 0956-5221

IS - 1

M1 - 101196

ER -