CFO overconfidence, environmental violations and firm performance. The moderating role of constituency statues

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 statues

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

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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
Pages (from-to)	(In-Press)
Number of pages	24
Journal	European Management Review
Volume	(In-Press)
Early online date	8 Jun 2025
DOIs	https://doi.org/10.1111/emre.70016
Publication status	E-pub ahead of print - 8 Jun 2025

Keywords

CFO overconfidence
constituency statutes
environmental violations
credit ratings

ASJC Scopus subject areas

Finance

Themes

Societal and Cultural Resilience

UN SDGs

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

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10.1111/emre.70016Licence: CC BY

2025 - Andrikopoulos et al. (Accepted Version EMR)Accepted author manuscript, 228 KB
European Management Review - 2025 - Andrikopoulos - CFO overconfidence environmental violations and firm performance TheFinal published version, 625 KBLicence: CC BY

Cite this

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AU - Uymaz, Yurtsev

AU - Vu, Huong

PY - 2025/6/8

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AB - 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.

KW - CFO overconfidence

KW - constituency statutes

KW - environmental violations

KW - credit ratings

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M3 - Article

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VL - (In-Press)

SP - (In-Press)

JO - European Management Review

JF - European Management Review

ER -

CFO overconfidence, environmental violations and firm performance. The moderating role of constituency statues

Abstract

Keywords

ASJC Scopus subject areas

Themes

UN SDGs

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Cite this