Cultural norms and CEO turnover during litigation: face-saving behaviors in the CEO turnover announcements

This study investigates how behavioral norms rooted in harmony-seeking cultures influence CEO turnover disclosures during corporate litigation. Firms often frame leadership changes with vague language to preserve face and avoid public confrontation. We find that ethical pressures from ESG monitors mediate this behavior, while foreign norm exposure reduces reliance on ambiguous narratives. Family and state-owned firms show lower turnover likelihood due to status quo bias and aversion to reputational disruption. Our findings reflect the deep role of cultural cognition and impression management in corporate governance signaling.