CEO Life History Strategies and Financial Reporting Quality

We use Life History (LH) theory to propose an overarching theoretical explanation to integrate prior research on variation in top executives’ impact on financial reporting quality and to demonstrate how observable differences in behavior can be explained by underlying evolutionary mechanisms. We provide empirical evidence that CEOs’ evolved preferences influence financial reporting quality in private firms. Resource allocation trade-offs shape organisms’ development of LH strategies on a fast–slow continuum. Fast individuals tend to follow aggressive reproduction strategies. Consequently, they engage in more impulsive, opportunistic, and risk-seeking behavior to achieve their goals. We develop and validate an LH index that reflects CEO LH strategies based on biodemographic data related to reproductive behavior, including the number of children, the number of partners, an individual’s reproductive timespan, and relationship duration. We provide consistent evidence across various ex post and ex ante measures and specifications that financial reporting quality in firms managed by fast CEOs is lower than in firms managed by slow CEOs