Is CEO’s Moral Attitude in Consonance with Ethical Business Behaviours in Australia? An Empirical Investigation

A closer look at the history of corporate misconduct has revealed that the actions and inactions of chief executives have typically led to the downfall of companies. In many cases, where a company faces a crisis due to its wrongdoing, its CEO is forced out of his job and faces legal action. Evidently, more CEOs are now being fired for their misconduct and ethical lapses rather than for financial performance. This highlights the need for companies to understand the role of their chief executives in developing their ethical business practices. The characteristics of chief executive officers are often assumed to influence their behaviour in a certain way. Prior research has focused on the effects of observable factors on firm outcomes while not considering the psychological factors that influence them. The characteristics of a chief executive officer are said to be influenced by their psychological traits. From a psychological perspective, their ethical behaviour is influenced by various social cognitions, such as values and moral attitudes. This suggests that the moral attitude of a CEO may contribute to unethical or unethical business practices.