Conservative traits and managerial forecasting style

  • Sara Bormann
  • Debbie Claassen
  • Christian Hofmann
  • Nina SchwaigerEmail author
Original Paper


We investigate whether conservatism as a personality trait, measured by managers’ signatures, influences managers’ forecasting style. Building on upper echelons theory and psychology literature, we predict that conservative personality traits such as the resistance to change and the ensuing cautiousness in updating beliefs influence managers’ forecasts. Our findings suggest that conservative CFOs more likely select earnings as compared to revenues as the main KPI of the forecast, keep the same KPI across years, and issue specific forecasts. Finally, we provide some evidence that conservative CFOs issue more accurate forecasts.


Management forecasts Conservatism Upper echelons theory Personality traits 

JEL Classification

M41 M12 



This study received generous support from the LMU Management Alumni Foundation at LMU Munich. We are grateful for helpful comments from Jan Bouwens, Chung-Yu Hung, Jochen Pierk, Thorsten Sellhorn, and workshop and conference participants at the 7th Workshop on Accounting and Regulation in Siena, Italy and the Contemporary Accounting Research Workshop at the LMU Munich, Germany.


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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Chair of Management ControlGoethe-University FrankfurtFrankfurt am MainGermany
  2. 2.BMW GroupMunichGermany
  3. 3.Institute for Accounting and ControlLMU MunichMunichGermany

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