The Effect of Supervisors on Employee Misconduct

• DOI: 10.2308/tar-2022-0411
• Publication Date: 2023-12-01T18:37:07Z
• Authors: Zachary T. Kowaleski; Andrew G. Sutherland; Felix W. Vetter
• Keywords: Misconduct; Supervisor; Trustworthiness; Delegate; Affect

ABSTRACT We study the influence of supervisors on employee misconduct at branches U.S. financial institutions. Individual supervisor fixed effects explain twice as much variation in branch firm effects. Supervisor is concentrated firms that theory suggests are most likely to delegate authority—firms with complex operations, distant branches, and trustworthy supervisors. Supervisors affect through their personnel decisions, attention employees past misbehavior, ethics industry rules training. After major internal control improvements, declines. Our results illustrate how above beyond firm-level factors. Data Availability: available from public sources cited text. JEL Classifications: D21; D82; G20, L22; L23; M12; M40.