Title: Reputation, Exposure, and Exit: Organizational Turnover after #MeToo

Original: arXiv:2606.03491v1 Announce Type: new Abstract: We study how economy-wide reputational shocks reshape corporate governance by examining board and executive turnover following the MeToo movement. We conceptualize the October 2017 revelations surrounding Harvey Weinstein as a common information shock that increased the expected cost of misconduct and intensified scrutiny across firms. Identification exploits cross-sectional variation in pre-shock exposure, measured by the frequency of Item 5.02 Form 8-K filings, which proxy for firms' sensitivity to governance-related disclosure and reputational risk. We develop a model of organizational exit in which directors respond to changes in reputational pressure through dynamic, belief-driven resignation hazards, generating heterogeneous and potentially nonlinear responses across firms. Empirically, we implement a continuous-treatment difference-in-differences design and complement it with dynamic event-study and matrix-completion estimators. We find that firms with greater pre-shock exposure experience significantly larger increases in resignation activity following the shock. The effects are concentrated in the immediate aftermath of the Weinstein revelations and are amplified through board-level interactions. The findings provide causal evidence that reputational shocks can induce rapid and systematic governance turnover, highlighting the central role of information, exposure, and organizational adaptation in shaping corporate responses to changes in the reputational environment.

Rewrite: Title: Reputation, Exposure, and Exit: Organizational Turnover after #MeToo

Original: arXiv:2606.03491v1 Announce Type: new Abstract: This research investigates how broad reputational disruptions transform corporate governance structures, focusing on the turnover of executives and board members in the wake of the MeToo movement. We treat the October 2017 allegations against Harvey Weinstein as a universal information shock that raised the anticipated penalties for misconduct and heightened corporate scrutiny. To identify causal effects, we leverage cross-sectional differences in pre-shock exposure, utilizing the frequency of Item 5.02 Form 8-K filings as a proxy for a firm’s sensitivity to governance disclosures and reputational risks. We propose an organizational exit model where directors react to shifting reputational pressures via dynamic, belief-based resignation hazards, leading to varied and potentially nonlinear outcomes across different firms. Our empirical approach employs a continuous-treatment difference-in-differences framework, supplemented by dynamic event-study and matrix-completion estimators. Our results indicate that firms with higher pre-shock exposure see substantially greater increases in resignations post-shock. These impacts are primarily observed in the period immediately following the Weinstein disclosures and are further intensified by board-level dynamics. These findings offer causal proof that reputational shocks can trigger swift and systematic governance changes, underscoring the critical influence of information, exposure, and organizational adaptation in determining how corporations react to shifts in the reputational landscape.

Source: arXiv Generated at: 2026-06-03 00:00:00 UTC