Beauty and appearance in corporate director elections

Philipp Geiler, Luc Renneboog, Yang Zhao

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We study the role of facial appearance in corporate director (re-)elections by means of director photographs published in annual reports. We find that shareholders use inferences from facial appearance in corporate elections, as a better (higher rated) appearance measure of a director reduces voting dissent. These heuristics are based on perceived competence, trustworthiness, likability, and intelligence, but not on physical beauty. The results are valid for director re-elections but not for first appointment elections as in the latter cases, shareholders may not as yet be familiar with a director’s looks. In firms with few institutional shareholders and more retail investors owning small equity stakes, the latter tend to rely more on facial appearance than institutional shareholders, presumably as institutions conduct more research on the director’s background and performance, and consequently rely less on facial appearance. While female directors generally experience lower voting dissent, their facial appearance does not affect their elections results.
Original languageEnglish
Pages (from-to)1-12
JournalJournal of International Financial Markets, Institutions and Money
Volume55
DOIs
Publication statusPublished - Jul 2018

Fingerprint

Elections
Institutional shareholders
Dissent
Shareholders
Voting
Retail
Equity
Investors
Annual reports
Trustworthiness
Heuristics
Inference

Keywords

  • Appearance
  • Beauty
  • Competence
  • Corporate Elections
  • Gender
  • behavioral finance
  • Annual general meeting
  • Extraordinary meeting

Cite this

@article{ce2f700a9a24468da655b4a25feaf4ce,
title = "Beauty and appearance in corporate director elections",
abstract = "We study the role of facial appearance in corporate director (re-)elections by means of director photographs published in annual reports. We find that shareholders use inferences from facial appearance in corporate elections, as a better (higher rated) appearance measure of a director reduces voting dissent. These heuristics are based on perceived competence, trustworthiness, likability, and intelligence, but not on physical beauty. The results are valid for director re-elections but not for first appointment elections as in the latter cases, shareholders may not as yet be familiar with a director’s looks. In firms with few institutional shareholders and more retail investors owning small equity stakes, the latter tend to rely more on facial appearance than institutional shareholders, presumably as institutions conduct more research on the director’s background and performance, and consequently rely less on facial appearance. While female directors generally experience lower voting dissent, their facial appearance does not affect their elections results.",
keywords = "Appearance, Beauty, Competence, Corporate Elections, Gender, behavioral finance, Annual general meeting, Extraordinary meeting",
author = "Philipp Geiler and Luc Renneboog and Yang Zhao",
year = "2018",
month = "7",
doi = "10.1016/j.intfin.2018.03.004",
language = "English",
volume = "55",
pages = "1--12",
journal = "Journal of International Financial Markets, Institutions and Money",
issn = "1042-4431",
publisher = "Elsevier BV",

}

Beauty and appearance in corporate director elections. / Geiler, Philipp; Renneboog, Luc; Zhao, Yang.

In: Journal of International Financial Markets, Institutions and Money, Vol. 55, 07.2018, p. 1-12.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Beauty and appearance in corporate director elections

AU - Geiler, Philipp

AU - Renneboog, Luc

AU - Zhao, Yang

PY - 2018/7

Y1 - 2018/7

N2 - We study the role of facial appearance in corporate director (re-)elections by means of director photographs published in annual reports. We find that shareholders use inferences from facial appearance in corporate elections, as a better (higher rated) appearance measure of a director reduces voting dissent. These heuristics are based on perceived competence, trustworthiness, likability, and intelligence, but not on physical beauty. The results are valid for director re-elections but not for first appointment elections as in the latter cases, shareholders may not as yet be familiar with a director’s looks. In firms with few institutional shareholders and more retail investors owning small equity stakes, the latter tend to rely more on facial appearance than institutional shareholders, presumably as institutions conduct more research on the director’s background and performance, and consequently rely less on facial appearance. While female directors generally experience lower voting dissent, their facial appearance does not affect their elections results.

AB - We study the role of facial appearance in corporate director (re-)elections by means of director photographs published in annual reports. We find that shareholders use inferences from facial appearance in corporate elections, as a better (higher rated) appearance measure of a director reduces voting dissent. These heuristics are based on perceived competence, trustworthiness, likability, and intelligence, but not on physical beauty. The results are valid for director re-elections but not for first appointment elections as in the latter cases, shareholders may not as yet be familiar with a director’s looks. In firms with few institutional shareholders and more retail investors owning small equity stakes, the latter tend to rely more on facial appearance than institutional shareholders, presumably as institutions conduct more research on the director’s background and performance, and consequently rely less on facial appearance. While female directors generally experience lower voting dissent, their facial appearance does not affect their elections results.

KW - Appearance

KW - Beauty

KW - Competence

KW - Corporate Elections

KW - Gender

KW - behavioral finance

KW - Annual general meeting

KW - Extraordinary meeting

U2 - 10.1016/j.intfin.2018.03.004

DO - 10.1016/j.intfin.2018.03.004

M3 - Article

VL - 55

SP - 1

EP - 12

JO - Journal of International Financial Markets, Institutions and Money

JF - Journal of International Financial Markets, Institutions and Money

SN - 1042-4431

ER -