CFO overconfidence, environmental violations and firm performance: The moderating role of constituency statutes

Panagiotis   Andrikopoulos; Shee-Yee Khoo; Patrycja Klusak; Yurtsev  Uymaz; Huong Vu

doi:10.1111/emre.70016

CFO overconfidence, environmental violations and firm performance: The moderating role of constituency statutes

Panagiotis Andrikopoulos
, Shee-Yee Khoo
, Patrycja Klusak^* (Corresponding Author)
, Yurtsev Uymaz
, Huong Vu

^*Corresponding author for this work

Accountancy & Finance, Finance

Coventry University
Bangor University
Heriot-Watt University
University of Cambridge
University of Sussex
University of East Anglia

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

1 Downloads (Pure)

Abstract

This study examines the relationship between Chief Financial Officer (CFO) overconfidence and firm performance through the lens of environmental violations and constituency statutes. Drawing on stakeholder and upper echelons theories, we find that firms with overconfident CFOs are more likely to commit environmental violations, which negatively impact their long-term performance. Our empirical evidence suggests that this effect can be moderated by the introduction of constituency statutes and violation penalties. Notably, firms with overconfident CFOs may benefit more from stakeholder-oriented laws while also incurring higher penalties for environmental violations.

Original language	English
Number of pages	24
Journal	European Management Review
Early online date	8 Jun 2025
DOIs	https://doi.org/10.1111/emre.70016
Publication status	E-pub ahead of print - 8 Jun 2025

Data Availability Statement

Data is not public and therefore cannot be shared.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 12 Responsible Consumption and Production
SDG 16 Peace, Justice and Strong Institutions

Keywords

CFO overconfidence
constituency statutes
credit ratings
environmental violations

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10.1111/emre.70016Licence: CC BY

Andrikopoulos_etal_CFO_Overconfidence_Environmental_VoR
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. https://creativecommons.org/licenses/by/4.0/
Final published version, 625 KBLicence: CC BY

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CFO overconfidence, environmental violations and firm performance: The moderating role of constituency statutes

Abstract

Data Availability Statement

UN SDGs

Keywords

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