Investing in managerial honesty

Professor Carmen Tanner and Dr Matthias Sohn (source: LEIZ)
Professor Carmen Tanner and Dr Matthias Sohn (source: LEIZ)

Can honesty and trust affect investment decisions - and if so to what extent? In cooperation with their colleagues, Professor Dr Rajna Gibson Brandon (University of Geneva) and Prof. Dr. Alexander F. Wagner (University of Zurich) Professor Carmen Tanner and Dr. Matthias Sohn from LEIZ conducted a research project in order to answer this question.

Triggered by a report by the International Banker Magazine in 2017 the research-team is conducting a thorough research project on private preferential investment behaviour with the aim to update the above mentioned report.

According to their first results, trust is the key pillar of financial and economic systems. Fraud, on the other hand, can be extremely damaging to firms, shareholders, employees and all other stakeholders. Somewhat contradictory observations can be made when it comes to managerial honesty. A number of scandels serve as proof for this problem.

The research project and thus this column analyses whether investors form a view about a CEO’s honesty based on his or her previous actions, and how this affects investment decisions.

To read the full report on VoxEU click here

or on World Economic Forum (WEF) click here

Zeit, um zu entscheiden

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