What are they looking at: directors’ facial appearances and shareholder voting outcomes

In this study, we investigate whether directors’ facial appearances are associated with shareholders’ voting behavior. Drawing on research in neuroscience and cognitive psychology and utilizing machine learning technology to measure directors’ trustworthiness, attractiveness, and dominance, we find that individual directors’ trustworthiness and attractiveness are positively associated with director elections. Furthermore, the higher average level of (variation in) directors’ trustworthiness or attractiveness leads to greater (lower) support from shareholders on say-on-pay proposals. The impact of facial appearances on shareholder voting behavior is weaker when shareholders know more about the directors’ track record. Finally, we find that directors’ perceived trustworthiness is positively associated with board meeting frequency, suggesting that impressions of trustworthiness can influence board dynamics and functioning.