Corporate leadership and utility from non-pecuniary factors: Essays on workplace safety, shared leadership, and long-term orientation

Fredrik Johannes Huhtamäki

Research output: ThesisDoctoral ThesisCollection of Articles


A fundamental question in financial research is how individuals make decisions under uncertainty, and how the structure of corporations and cultural aspects affect these choices. Correspondingly, in this thesis, I present three studies related to managerial utility maximization, investigated through the lens of agency theory to shed light on aspects related to managerial behavior. Whereas the theory of expected utility maximization typically focuses on the utility maximization of wealth, this dissertation gives evidence of managerial behavior consistent with the notion that utility is also derived from non-pecuniary factors.

The first essay investigates whether powerful CEOs are detrimental to workplace safety and health or whether they are “ethical guardians of the workforce”. The empirical evidence provided in the study shows that corporations led by powerful CEOs have fewer workplace related injuries and illnesses. Powerful CEOs have more influence over corporate decisions related to workplace safety and health and from an agency theory point of view, the CEO will take actions that maximize her utility. Therefore, this study shows that CEOs can derive utility from good workplace safety and health.

The second essay investigates the relationship between shared leadership and risk-taking through leverage. The amount of shared leadership within the corporation is difficult to measure directly. However, the second essay overcomes this empirical challenge by using corporations that are led by co-CEOs as a proxy for shared leadership. The study argues that CEOs maximize their utility at lower levels of risk than preferable from a shareholder point of view. The empirical evidence shows that shared leadership is negatively related to leverage, which could indicate that monitoring of more than one CEO is difficult, which enables co-CEOs to derive a private benefit in the form of low risk-taking. Moreover, the study finds a positive relationship between shared leadership and excess cash holdings and that shared leadership is related to higher agency costs.

The third essay investigates whether the perception of time and more specifically longterm orientation is related to the choice of earnings management strategy. The study uses a comprehensive global sample and finds that corporations in long-term oriented cultures rely on relatively more accrual-based earnings management while corporations in short-term oriented cultures rely on relatively more real earnings management. Both earnings management strategies are associated with costs. This study shows that the manager chooses such a strategy that minimizes the perceived costs of earnings management, and that the perception of time thus plays a role in managerial utility maximization.
Original languageEnglish
QualificationDoctor of Philosophy
  • Högholm, Kenneth, Thesis supervisor
Award date29.10.2021
Place of PublicationHelsinki
Print ISBNs978-952-232-443-6
Electronic ISBNs978-952-232-444-3
Publication statusPublished - 2021
MoE publication typeG5 Doctoral dissertation (article)


  • 512 Business and Management
  • workplace safety
  • workplace health
  • earnings management
  • shared leadership
  • CEO power
  • long-term orientation
  • utility
  • agency theory


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