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The Impact of CEO Reputation: Negative News and Economic Decisions
Unformatted Document Text:  The impact of CEO reputation   The impact of CEO reputation: Negative news and economic decisions Jack Welch, Bill Gates, Steve Jobs, Carlos Ghosn… media magnates and media magnets all who share with movie stars and world class athletes the intense spotlight of fame. Our eyes and ears are tuned to receive any news – even gossip and scandals – about these business icons. This increasing public attention has turned these business folks into celebrities; one recent book labels them “SuperCEOs” or a “super class of executive heroes” (Gaines-Ross, 2003, p. 100). The fame of these SuperCEOs, however, is not limited to their personal glories. Once granted celebrity status, a CEO can increase his/her ability to access resources such as human capital, capital market and raw materials and increase a firm’s competitive advantage (Ranft, Zinko, Ferris, & Buckley, 2006, p. 283). These premiums are often referred to as CEO capital. Gaines- Ross (2003) defines CEO capital as “the asset created by a CEO’s reputation … when it is harnessed to advance a company’s success” (p. 11). This intangible asset generated by CEO reputation has been substantiated in empirical studies. For instance, in one national survey of U.S. business influentials (Burson-Marstellar 2001) CEO reputation was considered to account for 48% of a company’s reputation. The B-M global studies in the same year reported similar proportions of corporate reputation attributable to the CEO – 48% in the United Kingdom, 54% in Australia, and 64% in Germany. These Burson-Marstellar surveys reflect the opinions of corporate executives, financial analysts and institutional investors, the business media, and government officials (retrieved from Gaines-Ross, 2003, p. 13). The studies cited above focus on the opinions influentials in business hold regarding the corporate reputation/CEO reputation relationship. How will publics – another important external stakeholder group – view CEOs and their reputations? How will their economic decisions (i.e., 1   

Authors: Sohn, Youngju., Lariscy, Ruthann. and Tinkham, Spencer.
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The impact of CEO reputation 
 
The impact of CEO reputation: Negative news and economic decisions 
Jack Welch, Bill Gates, Steve Jobs, Carlos Ghosn… media magnates and media magnets 
all who share with movie stars and world class athletes the intense spotlight of fame. Our eyes 
and ears are tuned to receive any news – even gossip and scandals – about these business icons. 
This increasing public attention has turned these business folks into celebrities; one recent book 
labels them “SuperCEOs” or a “super class of executive heroes” (Gaines-Ross, 2003, p. 100). 
The fame of these SuperCEOs, however, is not limited to their personal glories. Once granted 
celebrity status, a CEO can increase his/her ability to access resources such as human capital, 
capital market and raw materials and increase a firm’s competitive advantage  (Ranft, Zinko, 
Ferris, & Buckley, 2006, p. 283). These premiums are often referred to as CEO capital. Gaines-
Ross (2003) defines CEO capital as “the asset created by a CEO’s reputation … when it is 
harnessed to advance a company’s success” (p. 11). 
This intangible asset generated by CEO reputation has been substantiated in empirical 
studies. For instance, in one national survey of U.S. business influentials (Burson-Marstellar 
2001) CEO reputation was considered to account for 48% of a company’s reputation.  The B-M 
global studies in the same year reported similar proportions of corporate reputation attributable 
to the CEO – 48% in the United Kingdom, 54% in Australia, and 64% in Germany. These 
Burson-Marstellar surveys reflect the opinions of corporate executives, financial analysts and 
institutional investors, the business media, and government officials (retrieved from Gaines-Ross, 
2003, p. 13). 
The studies cited above focus on the opinions influentials in business hold regarding the 
corporate reputation/CEO reputation relationship. How will publics – another important external 
stakeholder group – view CEOs and their reputations? How will their economic decisions (i.e., 
 


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