Ethics disclosures promote a company’s commitment to ethical business practices and reduce the potential for corporate misconduct. This study aims to investigates whether CEOs with degrees from internationally ranked universities are associated with more corporate ethics disclosures.
This analysis is conducted in Indonesia, an emerging market where ethics disclosures are voluntary and in their infancy. Based on upper-echelon theory, CEOs are responsible for setting the ethical tone in their companies. The authors propose that CEOs with degrees from better ranked universities have had more exposure to business ethics and have developed stronger personal reputation capital, leading to a greater motivation to adopt ethical practices in their organizations.
The authors find that CEOs with degrees from universities ranked by QS World University Rankings have significantly more ethics disclosures in their annual reports. Furthermore, these ethics disclosures are more extensive for CEOs with postgraduate degrees from better ranked universities.
These findings have implications for CEO appointments in emerging markets, where ethics disclosures are voluntary and emergent. The findings suggest that in prioritizing the appointment of CEOs with degrees from internationally ranked universities, organizations in emerging markets can enhance their corporate ethics disclosures and practices.
