Top-level business executives are significantly more likely to commit financial crimes if their parents had been suspected or convicted of similar crimes, according to a new study from the University of Oulu's Business School.
It found the correlation was particularly strong when an executive's parents were convicted and imprisoned. However, the study did not examine such correlations among family-run businesses.
The study also found that business leaders found guilty of financial crimes were more likely to have a spouse who has committed similar crimes — and the likelihood of such crimes being committed increases the longer the couples have been together.
It also revealed experiential links, as executives who lived in areas where the incidence of financial crimes were above average were also more likely to commit such crimes themselves.
The study — Family matters: Exploring the link between parental and executive financial misconduct — was published in the Journal of Accounting Research.
It examined the financial crime convictions of CEOs and board members at limited liability companies. The researchers examined data of nearly 76,000 chief executives and board members found in Statistics Finland databases from 1995 to 2019.
The crimes committed by the executives and board members included accounting, tax and other financial law violations.
According to Oulu University's Professor of Accounting Juha-Pekka Kallunki, the study's results showed that behaviour plays a key role in financial crimes, even at the very top management level.
"The finding highlights the importance of 'unlearning' such behavior in the fight against financial crime," he said in a press release.
According to Kallunki, the study's research is important because even a single financial crime can have widespread effects.
"Financial crime committed by a company's top manager often leads to losses of jobs, tax revenue and capital investments, and affects a large number of people," he said.
