The Impact of corporate tax avoidance on board of directors and CEO reputation

Roman Lanis*, Grant Richardson, Chelsea Liu, Ross McClure

*Corresponding author for this work

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

This study examines the impact of corporate tax avoidance on board of directors and chief executive officer (CEO) reputation. Our regression results show that when firms engage in tax avoidance, both directors and CEOs, on average, are rewarded by improvements in their reputations as proxied by an increased number of outside board seats. In particular, both independent directors and non-CEO executive directors undergo positive changes in reputation. We also find that CEOs of tax-aggressive firms experience enhanced reputations by gaining extra board seats. Our main regression results hold based on additional analyses. Overall, this study provides important empirical evidence confirming an association between tax avoidance and the individual reputations of directors and CEOs.

Original languageEnglish
Pages (from-to)463-498
Number of pages36
JournalJournal of Business Ethics
Volume160
Issue number2
Early online date29 Jun 2018
DOIs
Publication statusPublished - Dec 2019
Externally publishedYes

Keywords

  • Board of directors
  • Chief executive officer (CEO)
  • Corporate reputation
  • Tax avoidance

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