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Ethical Leadership pp 61–92Cite as

Palgrave Macmillan

CEOs and Financial Misreporting

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Abstract

Recent high-profile accounting scandals involving major companies like Enron, WorldCom, Parmalat and Satyam, along with recent outcries over excessive CEO remuneration, have raised questions about the relationship between ethical leadership, financial incentives, and financial misreporting (Perel, 2003). One view is based on the assumption that the problem lies with the character and integrity of those CEOs who have been motivated by personal financial gain resulting from performance bonuses. According to this view, these scandals have occurred because the individual leaders concerned have lacked integrity, and have deliberately misled investors in order to protect high bonuses linked to company share price performance. Proponents of this view argue that this shows a need to reform the morals of CEOs in order to prevent such scandals in future (Bragues, 2008).

O what a tangled web we weave/ when first we practise to deceive

(Sir Walter Scott, Marmion, 1808).

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Authors
  1. Stephen Chen
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Editors and Affiliations

  1. University of Twente (NL), The Netherlands

    Carla Millar (Professor of International Marketing and Management) (Professor of International Marketing and Management)

  2. Ashridge Business School, UK

    Eve Poole (Deputy Director of the Public Leadership Centre) (Deputy Director of the Public Leadership Centre)

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Chen, S. (2011). CEOs and Financial Misreporting. In: Millar, C., Poole, E. (eds) Ethical Leadership. Palgrave Macmillan, London. https://doi.org/10.1057/9780230299061_4

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