The Impact of Corporate Tax Avoidance on Board of Directors and CEO Reputation
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.
KeywordsTax avoidance Corporate reputation Board of directors Chief executive officer (CEO)
JEL ClassificationH25 H26 M14
Compliance with Ethical Standards
Conflict of interest
The authors declare that they have no competing interests.
This paper does not contain any studies with human participants performed by any of the authors.
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