Political beliefs shape individuals' perceptions and ideas and profoundly influence their decision-making behaviour. Using this as a starting point, this paper examines the impact of the CEO's political beliefs on corporate violations. The study found that the political beliefs of party CEOs, which are strongly influenced by the ideology of "working for the people, obeying the law and being clean", effectively discourage corporate misconduct, and that this discouragement is influenced by the CEO's past and current environment. The CEO's past experience of living in a revolutionary old region and the external red cultural environment of the company he is currently working in have a strengthening effect on his political beliefs, further enhancing the inhibiting effect of party members' CEO political beliefs on corporate irregularities. This paper incorporates the political beliefs of executives into the framework of corporate non-compliance research, revealing the important role of enhancing the ideological capabilities of party members in curbing corporate non-compliance, which not only broadens the thinking of behavioral governance of listed companies, but also provides a basis for strengthening the cultivation of political beliefs of party members and bringing into play the pioneering role of party members in economic development.

Mao Mei, Xianyue Gao, Wang Min. The Power of Belief: CEO Political Belief and Corporate Violations. International Journal of Frontiers in Sociology (2023), Vol. 5, Issue 3: 44-60. https://doi.org/10.25236/IJFS.2023.050309.

[1] Chinese government website, data, http://www.gov.cn/shuju/2019-01/04/content_5355006.htm.

[2] Chen Gongmeng, Gao Ning. An empirical study on the effectiveness of securities regulation in China [J]. Management World, 2005(07): 40-47.

[3] Paul Povel, Rajdeep Singh, Andrew Winton. Booms, Busts, and Fraud [J]. The Review of Financial Studies, 2007, 20(4).

[4] Cao Chunfang, Chen Lulan, Zhang Tingting. "In the name of the law": Increased judicial independence and corporate irregularities [J]. Financial Research, 2017(05): 191-206.

[5] Zheng Jianming, Huang Xiaobei, Zhang Xinmin. Management performance forecast violations and analyst regulation [J]. Accounting Research, 2015(03): 50-56+95.

[6] Zhou Keguo, Ying Qianwei, Zhong Chang. Can media monitoring play a role in external governance?--Evidence from non-compliance of Chinese listed companies [J]. Financial Research, 2016(06): 193-206.

[7] Wei Zhihua, Li Changqing, Zeng Aimin, Chen Weihuan. Connected transactions, management power and corporate irregularities--Also on the governance role of audit supervision [J]. Audit Research, 2017(05): 87-95.

[8] Mark S. Beasley. An Empirical Analysis of the Relation between the Board of Director Composition and Financial Statement Fraud [J]. The Accounting Review, 1996, 71(4).

[9] Wang W, Jiao J, Jin Z, et al. CEO's religious belief and corporate philanthropic giving [J]. Qinghua Daxue Xuebao/Journal of Tsinghua University, 2015, 55(4):443-451.

[10] Chen Guojin, Lin Hui, Wang Lei. Analysis of corporate governance, reputation mechanism and illegal behavior of listed companies [J]. Nankai Management Review, 2005(06): 35-40.

[11] Zheng Chunmei, Li Wenyao. An empirical study on the effectiveness of China's independent director system based on accounting regulation [J]. Management World, 2011(03): 184-185. 

[12] Dai Yiyi, Chen Guanlin, Pan Jianping. Independent director resignation, political connections and corporate governance deficiencies [J]. Accounting Research, 2014(11): 16-23+96.

[13] Shan, Huajun. Internal control, corporate non-compliance and regulatory performance improvement: empirical evidence from listed companies in Shenzhen from 2007 to 2008 [J]. China Industrial Economics, 2010(11): 140-148. 

[14] Zhou Zejiang, Ma Jing, Hu Liufen. Can economic independence promote the governance function of supervisory boards - empirical evidence based on the perspective of corporate non-compliance [J]. Nankai Management Review, 2019, 22(06): 62-76.

[15] Carmelita Troy. CEO demographics and accounting fraud: who is more likely to rationalize illegal acts? Strategic Organization, 2011, 9(4).

[16] Donald C. Hambrick, Phyllis A. Mason. Upper Echelons: The Organization as a Reflection of Its Top Managers [J]. The Academy of Management Review, 1984, 9(2).

[17] Gan Weiyu, Xu Xixiong, Lin Dingjian. Executive gender, power structure and corporate anti-ethical behavior-an empirical test based on a paired sample of PSM violations by listed companies [J]. Foreign Economics and Management, 2015, 37(10): 18-31.

[18] Gu L, Liu ZJ. A study on the background characteristics of executives and corporate governance irregularities of listed companies in China [J]. Science and Technology Management, 2013, 34(02): 152-164.

[19] Yang Wei, Yao Tao. The relationship between corporate governance and financial fraud: empirical evidence from Chinese listed companies [J]. Journal of Chongqing University (Social Science Edition), 2006(05): 24-30.

[20] Shen Hongbo, Yang Yulong, Pan Fei. Political affiliation, securities violations and surplus quality of privately listed companies [J]. Financial Research, 2014(01): 194-206.

[21] Efraim Benmelech, Carola Frydman. Military CEOs [J]. Journal of Financial Economics, 2015, 117(1).

[22] Sun Mengyue. A study on executives' early disaster experience, financial irregularities and stock price collapse risk [D]. Tianjin University, 2020.

[23] Liu A. M., Zhou J. J. A study on the influence of executives' overseas background on corporate irregularities [J]. Financial Development Research, 2021(08): 11-19.

[24] Donald C. Hambrick. Upper Echelons Theory: An Update [J]. The Academy of Management Review, 2007, 32(2).

[25] Barbara S. Lawrence. Perspective—The Black Box of Organizational Demography [J]. Organization Science, 1997, 8(1).

[26] Rijsenbilt A, Commandeur H. Narcissus enters the courtroom: CEO narcissism and fraud [J]. Journal of business ethics, 2013, 117: 413-429.

[27] Wang Xiqin, Wang Lianxiang, Jin Weisheng. CEO overconfidence, female directors and corporate irregularities [J]. Statistics and Information Forum, 2018, 33(12): 111-118.

[28] Wan Junren. The "modernity" of the crisis of faith and its cultural explanation [J]. Journal of Tsinghua University (Philosophy and Social Science Edition), 2001(01): 22-29.

[29] Wolfgang Brechinka, Faith, Morality and Education: An Examination of Normative Philosophy [M], Shanghai: East China Normal University Press, 2008: (40).

[30] Liu C. Are women greener? Corporate gender diversity and environmental violations[J]. Journal of Corporate Finance, 2018, 52:118-142.

[31] Cheng Bo, Xiong Ting, Lin Minhua. Confucian traditional culture and corporate irregularities - an analysis based on Chinese family listed companies [J]. Economic Theory and Economic Management, 2018(10): 72-86.

[32] Di Giuli A, Kostovetsky L. Are red or blue companies more likely to go green? Politics and corporate social responsibility [J]. Journal of Financial Economics, 2014, 111(1): 158-180.

[33] Hutton I, Jiang D, Kumar A. Corporate policies of Republican managers [J]. Journal of Financial and Quantitative analysis, 2014, 49(5-6): 1279-1310.

[34] Marquis C, Qiao K. Waking from Mao’s dream: Communist ideological imprinting and the internationalization of entrepreneurial ventures in China [J]. Administrative Science Quarterly, 2020, 65(3): 795-830.

[35] Chin M K, Donald C. Hambrick, Linda K. Treviño. Political Ideologies of CEOs: The Influence of Executives' Values on Corporate Social Responsibility [J]. Administrative Science Quarterly, 2013, 58(2).

[36] Chin M K, Semadeni M. CEO political ideologies and pay egalitarianism within top management teams [J]. Strategic Management Journal, 2017, 38(8): 1608-1625.

[37] Kim D, Kim I, Krueger T M, et al. The influence of CEO political ideology on labor relations and firm value [J]. Managerial Finance, 2021, 47(9): 1300-1319.

[38] Unsal O, Hassan M K, Zirek D. Corporate lobbying, CEO political ideology and firm performance [J]. Journal of Corporate Finance, 2016, 38: 126-149.

[39] Dai Yiyi, Yu Wei, Ning Bo, Pan Yue. Party membership of private enterprise chairmen and corporate financial irregularities [J]. Accounting Research, 2017(06): 75-81+97.

[40] Shahib H. Financial Regulation Violations and Corporate social responsibility disclosure: A test of legitimacy theory in Indonesia Stock Exchange [J].  2016.

[41] Xie Zuomiao, Yang Huiting, Wang Jianwen. The impact of Marxist beliefs of state-owned enterprise executives on corporate performance [J]. Economic and Management Studies,2019,40(09):135-144.

[42] Zhou Yi, Hu Anning. Capital with faith--A study on the charitable giving behavior of private enterprise owners in Wenzhou [J]. Sociological Research,2014,29(01):57-81+243.

[43] Ni Changhong. Political climate of enterprises and social responsibility reporting strategies - a perspective based on institutional pressure [J]. Journal of Shanxi University of Finance and Economics, 2019, 41(08):100-112.

[44] Li Rongrong. Experimenting with political beliefs [J]. Theoretical exploration,2004(04):77-78.

[45] Zheng Yongkou. Ideology as political belief [J]. Henan Social Science,2010,18(04):97-100.

[46] Huang Yingshan. Subjectivity of political beliefs: The ecological implications of cultivating people's political beliefs [J]. Journal of Nanchang University (Humanities and Social Sciences Edition), 2014, 45 (04):50-54.

[47] Jing Xuemin. Political Beliefs in a Socialist Harmonious Society [J]. Journal of Social Science 2012, 3.

[48] Jing Xuemin. A Theory of Faith in Contemporary Chinese Society [J]. Beijing: People's Publishing House, 2008, (183).

[49] Wang D, Du F, Marquis C. Defending Mao’s dream: How politicians’ ideological imprinting affects firms’ political appointment in China [J]. Academy of Management Journal, 2019, 62(4): 1111-1136.

[50] Zheng Yongkou. Ideology as political belief [J]. Henan Social Science,2010,18(04):97-100.

[51] Jiang Zemin. Selected Writings of Jiang Zemin (Volume II) [M]. Beijing: People's Publishing House, 2006, (361).

[52] Marquis C, Tilcsik A. Imprinting: Toward a multilevel theory [J]. The Academy of Management Annals, 2013, 7(1): 195-245.

[53] Ashforth B K, Saks A M. Socialization tactics: Longitudinal effects on newcomer adjustment [J]. Academy of management Journal, 1996, 39(1): 149-178.

[54] Bianchi E C. Entering adulthood in a recession tempers later narcissism [J]. Psychological science, 2014, 25(7): 1429-1437.

[55] Kish-Gephart J J, Campbell J T. You don’t forget your roots: The influence of CEO social class background on strategic risk taking [J]. Academy of Management Journal, 2015, 58(6): 1614-1636.

[56] Schoar A, Zuo L. Shaped by booms and busts: How the economy impacts CEO careers and management styles [J]. The Review of Financial Studies, 2017, 30(5): 1425-1456.

[57] Sørensen J B, Fassiotto M A. Organizations as fonts of entrepreneurship [J]. Organization Science, 2011, 22(5): 1322-1331.

[58] Gong Fangbin. The new political outlook: innovation points and breakthroughs [J]. People's Forum, 2012(28): 34-37. 

[59] Ibarra H. Provisional selves: Experimenting with image and identity in professional adaptation [J]. Administrative science quarterly, 1999, 44(4): 764-791.

[60] Dokko G, Wilk S L, Rothbard N P. Unpacking prior experience: How career history affects job performance [J]. Organization Science, 2009, 20(1): 51-68.

[61] Lian Yanling, Zhang Mingfa, Zhou Qiong, Zheng Weiwei. Maintaining pioneering exemplarity: Party CEO ideological imprinting and corporate charitable giving [J]. Foreign Economics and Management, 2021, 43(10): 3-20.

[62] Xia Xin. Experimental discussion on the role of political beliefs [J]. Journal of Zhoukou Normal College, 2005(04): 56-58.

[63] Opinions of the CPC Central Committee on strengthening the political construction of the Party [N]. People's Daily, 2019-02-28(001).

[64] Zhang Y Q. The Contradiction Between Theory Charm of Belief and Students' Main Needs——Some Thoughts On the Ideological and Political Belief Education [J]. Journal of Shanxi Agricultural University (Social Science Edition), 2013.

[65] Communist Party Network, https://www.12371.cn/2021/02/03/ARTI1612333898768340.shtml.

[66] Communist Party Network, https://www.12371.cn/2020/08/07/ARTI1596782396750713.shtml.

[67] Communist Party Network, https://www.12371.cn/2021/02/03/ARTI1612332889964223.shtml.

[68] Chen Tingting, Ji Zhengju. A multidimensional examination of the construction of political beliefs in the Chinese Communist Party in the past century [J]. Journal of Hunan University of Science and Technology (Social Science Edition), 2021, 24(03): 117-122.

[69] Zhao B C, Xu S S. Does consumer unethical behavior relate to birthplace? Evidence from China [J]. Journal of Business Ethics, 2013, 113(3): 475-488.

[70] Zhao Baochun. The association between consumers' ethical belief level and their place of birth: An empirical study in the context of urban-rural binary society in China [J]. Management World, 2011(01): 92-100+144.

[71] Yu Wei, Weng Ruoyu, Chen Qiuping. A study on the red cultural factors in the philanthropic behavior of private enterprises [J]. Southern Economy, 2020(04): 100-114.

[72] Zhou Zejiang, Liu Zhongyan. A study on the impact of local tenure of independent directors on irregularities of listed companies - empirical evidence based on the perspective of political affiliation and nature of property rights [J]. China Soft Science, 2017(07): 116-125.