A recent analysis of Board of Director's political makeup of S&P 1500 firms found that in 276 cases of financial misconduct, those whose members donated to conservative politicians (a reasonable proxy for their own proclivities) were 3X more likely to dismiss a CEO than liberal Boards.

The implication is that, at least when it comes to financial matters, the primary reason companies exist, conservatives will demand more ethical conduct.  The authors believe they have addressed sample‐induced endogeneity and alternative explanations with additional analyses.

If this holds up, how else might the ideology of board members influence critical actions companies take?



Citation: U. David Park, Warren Boeker, David Gomulya, 'Political Ideology of The Board and Ceo Dismissal Following Financial Misconduct', Strategic Management Journal, 11 September 2019 https://doi.org/10.1002/smj.3088


H/T Prof. Cory Clark