This study investigates the relationship between firm underperformance and corporate misconduct, focusing on the moderating effects of CEO mental health and prior criminal convictions. Using a comprehensive dataset of Dutch firms from 2011 to 2022, the findings reveal that underperformance significantly increases the likelihood of corporate misconduct. This relationship is amplified when CEOs experience mental health challenges and mitigated when CEOs have prior personal criminal convictions. The study contributes to the corporate misconduct literature and upper echelons literature by emphasizing the pivotal role of CEO characteristics in shaping organizational responses to performance pressures.
