Internal Control Weakness and CEO Media Exposure

Abstract

This study selects a sample of Taiwanese electronic firms from 2010 to 2014 to investigate the relationship of firms’ internal control weakness (ICW) and CEO media exposure. Empirical evidences show that firms with more internal control weakness experience higher CEO media exposure and the results remain consistent using an alternative measure of media exposure taking into accounting of media tone. This implies that CEOs are concerned with corporate reputation in the media so they will take actions in the media when facing negative events such as internal control weakness.

This study further finds that corporate governance alleviates the above-mentioned relationships. Similarly, family firms would less likely allow CEOs to overly exposed in the media for possible impression management when incurring internal control weakness comparing to non-family firms.