Beauty and Appearance in Corporate Director Elections

P.H.M. Geiler, Luc Renneboog, Y. Zhao

Research output: Working paperDiscussion paperOther research output

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.
LanguageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages24
Volume2018-033
StatePublished - 11 Sep 2018

Publication series

NameCenER Discussion Paper
Volume2018-033

Fingerprint

beauty
director
election
shareholder
voting
election result
annual report
trustworthiness
investor
heuristics
intelligence
equity
firm
performance
experience

Keywords

  • appearance
  • beauty
  • competence
  • corporate elections
  • gender
  • behavioral finance
  • Annual general meeting
  • Extraordinary meeting

Cite this

Geiler, P. H. M., Renneboog, L., & Zhao, Y. (2018). Beauty and Appearance in Corporate Director Elections. (CenER Discussion Paper; Vol. 2018-033). Tilburg: CentER, Center for Economic Research.
Geiler, P.H.M. ; Renneboog, Luc ; Zhao, Y./ Beauty and Appearance in Corporate Director Elections. Tilburg : CentER, Center for Economic Research, 2018. (CenER Discussion Paper).
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Geiler, PHM, Renneboog, L & Zhao, Y 2018 'Beauty and Appearance in Corporate Director Elections' CenER Discussion Paper, vol. 2018-033, CentER, Center for Economic Research, Tilburg.

Beauty and Appearance in Corporate Director Elections. / Geiler, P.H.M.; Renneboog, Luc; Zhao, Y.

Tilburg : CentER, Center for Economic Research, 2018. (CenER Discussion Paper; Vol. 2018-033).

Research output: Working paperDiscussion paperOther research output

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T1 - Beauty and Appearance in Corporate Director Elections

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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.

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Geiler PHM, Renneboog L, Zhao Y. Beauty and Appearance in Corporate Director Elections. Tilburg: CentER, Center for Economic Research. 2018 Sep 11, (CenER Discussion Paper).