CEO beauty and management guidance
ISSN: 1321-7348
Article publication date: 20 December 2021
Issue publication date: 19 January 2022
Abstract
Purpose
The authors study whether CEO beauty influences management guidance.
Design/methodology/approach
The authors calculate an attractiveness score based on facial symmetry and perform regression analyses to examine the relation between CEO beauty and management guidance.
Findings
The authors find that attractive CEOs are more likely to issue voluntary management earnings guidance. After controlling for this appearance-based self-selection, the authors document that management forecasts provided by attractive CEOs are more optimistic yet less precise. Consistent with this result, the authors find that analysts' consensus forecast error following management forecasts made by attractive CEOs is larger than such error following management forecasts made by unattractive CEOs. The authors further find that the perceived credibility of management forecasts by attractive CEOs is not different from that by unattractive CEOs.
Originality/value
These findings suggest that attractive CEOs are more active but less skillful in issuing management forecasts. This adds to the emerging accounting literature on the relation between facial appearance and information delivery.
Keywords
Acknowledgements
The authors thank helpful comments from Haiyan Zhou (editor), two anonymous reviewers, Marcus Burger, Joseph Comprix, Janet Phillips, Sabatino Silveri, and workshop participants at Rutgers University – Camden and the 2018 American Accounting Association Northeast Region Meeting in Greenwich, Connecticut. This work was supported in part by the Whitcomb Center for Research in Financial Services at Rutgers University.
Citation
Guo, J., Kim, J.Y., Kim, S. and Zhou, N. (2022), "CEO beauty and management guidance", Asian Review of Accounting, Vol. 30 No. 1, pp. 152-173. https://doi.org/10.1108/ARA-09-2021-0174
Publisher
:Emerald Publishing Limited
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