CEO qualities and codes of ethics

Ethical issues have received growing attention recently, after corporate scandals and during the current economic crisis. Several initiatives have been adopted to restore confidence and trust in businesses, such as ethics codes. In addition, as a result of those scandals and financial frauds, several rules have focused on the role played by Boards of Directors in the planning and monitoring of codes of ethics. However, the empirical evidence is still scarce and needs some degree of extension. The purpose of this study is to determine the influence of several corporate governance features-particularly, the Chief Executive Officer (CEO)-on the decision of developing an ethics code, among Spanish companies. Our main findings point out the lack of influence of the CEO's characteristics (except for CEO reputation) on the likelihood of having a corporate code, indicating that this decision has to do with a choice made by the company overall, perhaps because of regulatory reasons or stakeholders' expectations. Also, we have checked how other variables, such as the extent of a firm's participation in defence or other government contracts or multiple listings of the company in different financial markets, can influence the decision of developing an ethics code.