A Research On The Relationship Between The Founders' Immoral Behaviors And The Enterprise Value

Previous studies have found that immoral behaviors in a company bring negative impact on the enterprise's value.Different from the existing literature,this paper focuses on the relationship between the founder's personal morality and the enterprise's value.With the continuous progress of society and the rapid development of economic globalization,more and more people have poured into the wave of "Widespread Entrepreneurship and Innovation".A founder of an enterprise is not only the pioneer of the enterprise,but also the superintendent of the enterprise.At the same time,due to the characteristics of fast communication speed,wide coverage,large influence range and strong guidance of digital media,a founder also needs to stand on the stage to publicize products of the enterprise as "spokesmen” to expand the brand influence and obtain financing.This also means that every movement of the "star entrepreneur" will be subject to public supervision.When the personal immoral behavior of the founder of an enterprise is exposed,negative public opinion will be formed.Will this affect the enterprise and affect value of the enterprise ?Taking the "sex scandal" of JD.'s founder as an example,this paper systematically analyzes the impact of the founder's immoral behavior on the enterprise value.The study found that:(1)The founder of JD was punished by the capital market after his immoral behavior was exposed,with negative accumulated excess returns and damaged wealth of the shareholders;(2)After the immoral behavior of JD.'s founder was exposed,it had a significant negative effect on the performance of the company because there was a decline in the performance.(3)After the immoral behavior of JD.'s founder was exposed,it increased the risk of turnover of the senior executives because the company's organizational structure had to be changed which had an impact on the corporate governance.Therefore,this paper suggests: at the social level,first of all,the social integrity awareness of company executives should be improved and the restriction of social morality and law should be enhanced;secondly,the reputation information of the senior executives should be made public,and relevant market-oriented system of reward and punishment and system of entry and exit should be established accordingly.At the enterprise level,first of all,we must construct and continuously innovate the organization and management mechanism of the enterprises so as to transform the enterprises into autonomous social organizations;secondly,the enterprises should have certain capability of crisis public relations and remedial plans for the crisis;finally,the enterprises should strengthen the timeliness and effectiveness of information disclosure and maintain good relations with the media to reduce unnecessary losses caused by excessive suspicion from the media.