Research Summary: We examine the influence of CEOs' military background on financial misconduct using two distinctive datasets. First, we make use of accounting and auditing enforcement releases (AAER) issued by the U.S. Securities and Exchange Commission (SEC), which contain intentional and substantial cases of financial fraud. Second, we use a dataset of “lucky grants,” which provide a measure of the likelihood of grant dates of CEOs' stock options having been manipulated. Results for both datasets indicate that CEOs who served in the military are less inclined to be involved in fraudulent financial reporting and to backdate stock options. In addition, we find that these relationships are moderated by board oversight (CEO duality and independent directors in the board). Managerial Summary: CEOs who formerly served in the U.S. military are prevalent among U.S. firms. The military puts strong emphasis on the obedience of its personnel. In this study, we test if time spent in the military leads individuals to be more obedient to rules and regulations in the years after they have left the military and become CEOs. Our findings strongly suggest that CEOs who served in the U.S. military are less likely to be involved in financial misconduct. We also find evidence that tougher board oversight strengthens this relationship. Our findings have implications for regulators, auditors, practitioners, and researchers who are interested in determinants of and mechanisms to prevent fraud and stock option backdating.

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The debate on convergence versus divergence or stasis in human resource management (HRM) practices over time is still ongoing. We look at configurations of organisations' personnel selection practices and empirically analyse the role of geographic, cultural and regulatory institutional distance between countries for emerging similarity or dissimilarity in these practices. We also examine whether convergence occurred between 1995 and 2015. Based on the Cranet data of 25,869 organisations from 42 countries and statistical tests using energy distance, we find a pattern over time, moving from stasis to divergence. In addition, personnel selection configurations relate to cultural and regulatory institutional differences in the sense that smaller distances lead to higher similarity. This is not the case, however, for geographic distance. Our study adds to the debate on HRM convergence and offers a new method of analysis for other areas of HRM research where configurations instead of single HRM practices play a role.

Algorithms might prevent prejudices and increase objectivity in personnel selection decisions, but they have also been accused of being biased. We question whether algorithm-based decision-making or providing justifying information about the decision-maker (here: to prevent biases and prejudices and to make more objective decisions) helps organizations to attract a diverse workforce. In two experimental studies in which participants go through a digital interview, we find support for the overall negative effects of algorithms on fairness perceptions and organizational attractiveness. However, applicants with discrimination experiences tend to view algorithm-based decisions more positively than applicants without such experiences.We do not find evidence that providing justifying information affects applicantsregardless of whether they have experienced discrimination or not.

Recent research on CEOs’ narcissism has mostly used unobtrusive measures, even though such measures have not been validated sufficiently. In two settings (Study 1 with 601 participants from various occupations and Study 2 with 97 managing directors), we analyze the construct validity of the commonly used narcissism index (NI). We find that the NI is only moderately correlated with the established and validated Narcissistic Personality Inventory (NPI), which calls into question the convergent validity of the NI. We further alter the company’s financial performance in our simulation to test whether performance affects the NI. Results show that individuals have different levels of NI after a period with a high compared with a low financial performance. This casts doubt on previous findings in organizational research using the NI and other unobtrusive measures because it reverses the common assumption of cause and effect.