By Dr Thai Nguyen, Lecturer in Accounting
Corporate earnings manipulation isn’t always about outright fraud. Often, it’s about bending the rules—delaying expenses, speeding up revenues, or leaning on “helpful” accounting tricks to paint a rosier picture. And one moment where this behavior tends to spike? Mergers and acquisitions (M&As).
These deals are high-pressure. CEOs want their companies to look healthy and strong—especially when the deal is paid for with shares instead of cash. Investors, regulators, and analysts all pay close attention. But here’s a question we rarely consider: does the relationship between the CEO and their board influence how honest the numbers really are? And what if they’re around the same age?
My research suggests it does—and not in the way many might think.
Trust, not trouble?
In corporate governance, there’s a long-standing fear that if a board gets too close to the CEO—if they’re too “friendly”—they’ll stop asking tough questions. Accountability suffers. That’s why so many rules and guidelines encourage “independence.”
But here’s the twist: when CEOs and board members are close in age, companies are less likely to manipulate earnings during M&As.
Why? It turns out that being from the same generation doesn’t always mean complacency. It can mean shared context. When leaders have similar life and work experiences, they often communicate more easily, understand each other better, and collaborate more effectively. That trust can lead to more honest decision-making—not less scrutiny. Specifically, if the CEOs and board members are of similar age, especially during high-pressure moments like M&As, “control and monitoring” can be weakened.
Our recent study exploits that argument by using 544 share-funded M&A deals in the UK. The empirical estimation found that companies with CEO–board age alignment were significantly less likely to “cook” their earnings. Simply put, when CEOs and boards share similar age profiles, there tends to be stronger governance and less financial misreporting during critical deals.
This doesn’t mean diversity alone guarantees good governance. But it does reinforce that having a range of perspectives—including age diversity—is an important part of holding management accountable and reducing financial misreporting.
What this means beyond the boardroom
For investors, a CEO and board who are close in age can signal stronger oversight and a lower risk of earnings manipulation—especially in high-stakes deals like mergers and acquisitions. Our research shows that when leaders share similar life stages, their collaboration can enhance monitoring and promote greater honesty in financial reporting. This highlights how the human dynamics behind the numbers shape corporate transparency.
*The full research can read at: