CEO Marital Status and the Readability of 10-K Reports

The aim of the Essex Accounting Centre (EAC) research seminar series is to support our world-class research activities in six key areas: accounting and global development; business education; capital Markets, audit, regulation & reporting; publicness and resilience, precarity, exclusion & social justice; and environment, climate change & vulnerability. The seminar series is also expected to promote inter-disciplinary research that links the work of members of the centre with others both within the university and with external institutions.

This study investigates the impact of CEO marital status on the readability of 10-K reports using a large sample of US-listed firms.

Results show that firms led by single CEOs display less readable 10-K reports than those of their married counterparts. Our findings remain robust after a wide range of endogeneity tests and investigating other disclosure attributes. Furthermore, a difference-in-difference test surrounding the CEO turnover shows an improvement in the readability of 10-K reports for firms that switched from a single to a married CEO.

Further analysis reveals that single CEOs are less likely to provide complex 10-K disclosures in financially constrained firms and firms operating in religious environments. We also find that other CEO characteristics, such as gender, tenure, and equity compensations act as a catalyst for enhancing or weakening the relationship between CEO marital status and disclosure readability. Overall, our study highlights the importance of CEOs’ marital status in shaping their disclosure attributes.