Short BIO: Nicolai J. Foss is a Professor of Strategy at the Department of Strategy and Innovation, CBS, Honorary Adjunct Professor, Department of Marketing & Management, Southern Denmark University, External Chair, Danish Institute for Advanced Studies, 2020-2025, and a Professor II at the Norwegian School of Economics. He is a Knight of the Order of the Dannebrog.

Trained as an economist at the Copenhagen University (M.Sc.,1989), Foss received his PhD degree from the Copenhagen Business School in 1993, where he was Assistant, Associate and Full Professor, before he moved to Bocconi University 1 September 2016. From 2016-2019 he was the Rodolfo Debenedetti Chaired Professor of Entrepreneurship at the Bocconi University, Milano. He has held part-time and visiting professorships at the Warwick Business School, Hong Kong Polytechnic University, Norwegian School of Economics, Lund University, Luiss Guido Carli-Roma, ERC Rennes, and Agder University.

Abstract: Research interest in the links between the private-life events of executives (e.g., divorce) and firm and stakeholder outcomes is increasing. However, the theoretical and empirical nature of the underlying mechanisms remain unclear. The novelty of this paper is theorize and show that CEO and employee genders are important parts of these mechanisms. As the baseline for our analysis, we first examine the first order, “direct” effects of CEO divorce on firm performance, adding CEO gender to existing research on this relation. We argue that because of gender-specific differences with respect to stress reactions, attention allocation, and also because women who make it to the CEO level are likely to be, on average, more capable than their male counterparts, the impact on firm performance will be particularly severe in the event of a female CEO divorcing.  We subsequently examine the second-order, effects of CEO divorce on firm performance, arguing that the influence of CEO divorce on employee wages and turnover is conditional on the genders of the CEO and employees of the focal firm. Finally, we argue that these employee consequences influence firm outcomes. Using Danish register data, we find that the negative influence on firm performance of divorce is stronger when the CEO is female and that divorce influences the gender pay gap, as the divorce of a female CEO decreases male employees’ wages. We also find that more men leave following the divorce of a female CEO. We finally offer evidence that the influence on performance of these employee consequences largely explains the gender contingent aspect of CEO divorce.

Link:https://www.cbs.dk/en/research/departments-and-centres/department-of-strategy-and-innovation/staff/njfsi