Check out the recent article in the Harvard Business Review about what happens when your CEO lies about personal matters, has a sexual affair, makes questionable use of corporate funds, commits “objectionable” personal behavior, or offends customers or public groups.

The article predictably concludes that boards need to investigate and be proactive; no surprise there.  What seems anomalous is that eleven of the 38 studies incidents resulted in positive stock price action (although average stock prices fell slightly in the short term), yet 45% of companies later suffered adverse  reactions such as accounting restatements, lawsuits, shareholder action or bankruptcy.  And 58% of CEOs eventually lost their jobs over their actions.  And only actions involving financial activities resulted in uniform dismissal.

It is hard to parse all this data.  It may be that we do not know the whole story in many of these cases, or that the sample size is too small to be of much help beyond generating the obvious: boards should act.

And as for those companies where the stock ticked upwards?  Perhaps there is some truth in the adage that it doesn’t matter what you say about someone, just so long as you spell their name correctly.