We examine the impact of CEO-director ties on labor investment efficiency. Using an aggregate measure of CEO-director ties we find that CEOs who have strong ties with independent board members are associated with inefficient labor investment. The effect is stronger in firms that rely more on skilled labor and those that are financially constrained, and that inefficient labor investment exacerbates labor cost stickiness. Our results are robust to selection bias, endogeneity concerns, and alternative explanations. Overall, the results are consistent with the view that stronger CEO ties to independent board members makes monitoring ineffective, which, in turn, aggravates the inefficient labor investment problem. Thus, we identify a potential channel through which CEO-director ties can be detrimental to shareholder value.

In this paper, we theorize that dedicated institutional investors are more likely than transient institutional investors to appoint female directors to investee firms with all-male boards, particularly those with high opacity. We conjecture that dedicated investors appoint female directors as a governance mechanism to improve the financial reporting quality of these investee firms. Specifically, we find that through the appointment of female directors, dedicated institutional investors trigger the release of stockpiled negative accounting information, thereby increasing the likelihood of a stock price crash risk. We also show that dedicated investors, through the appointment of female directors, improve investee firms' corporate disclosure environment by decreasing earnings management. Finally, we find that through continued service on investee firms' boards, female directors reduce the future likelihood of a stock price crash.

We examine the impact of CEOs’ public charity affiliations on corporate labor violations and find that public-charity-affiliated CEOs have a lower likelihood of engaging in labor violations than their non-affiliated peers. In a disaggregated analysis, we find the result to be driven primarily by wage and hour violations. This finding is validated when we compare changes in wage and hour violations around different types of CEO turnover. We further identify the promotion of a positive corporate culture and an increase in labor-related expenditures as the main channels through which CEOs’ public charity affiliations affect wage and hour violations. In addition, we find that firms led by public-charity-affiliated CEOs experience lower employee turnover. The impact of public-charity-affiliated CEOs on reducing the likelihood of wage and hour violations is persistent and is more pronounced for CEOs who exhibit more altruistic behavior prior to assuming office. Overall, we provide persuasive evidence that CEOs’ public charity affiliations are beneficial to firms.