CEO and CFO conscientiousness and working capital management during global financial crisis

Behavioral finance research has examined the influence of CEO personality traits on firm policies and performance. Our study focuses on the conscientiousness of CEOs and CFOs during the 2008 financial crisis and its impact on working capital management. We find that firms with highly conscientious executive leadership benefitted from a greater increase in trade credit from suppliers in comparison to trade credit offered to their customers. Additionally, firms led by highly conscientious CFOs tend to keep longer relationships with key customers. As a result of improved efficiency in working capital management, firms led by conscientious top executives performed better during the financial crisis, as evidenced by a higher Tobin’s Q.