The authors study whether CEO beauty influences management guidance.
The authors calculate an attractiveness score based on facial symmetry and perform regression analyses to examine the relation between CEO beauty and management guidance.
The authors find that attractive CEOs are more likely to issue voluntary management earnings guidance. After controlling for this appearance-based self-selection, the authors document that management forecasts provided by attractive CEOs are more optimistic yet less precise. Consistent with this result, the authors find that analysts' consensus forecast error following management forecasts made by attractive CEOs is larger than such error following management forecasts made by unattractive CEOs. The authors further find that the perceived credibility of management forecasts by attractive CEOs is not different from that by unattractive CEOs.
These findings suggest that attractive CEOs are more active but less skillful in issuing management forecasts. This adds to the emerging accounting literature on the relation between facial appearance and information delivery.
