CEO Characteristics and Their Influence on the Development of a Whistleblowing Culture

Studies of small and medium-sized enterprises have provided evidence that CEOs of such firms can have a dominating influence on firm activities. Drawing on upper echelons theory, we analyze the influence of CEO personality (CEO internal locus of control), CEO ownership and CEO education on the evaluation of middle manager performance. In line with our expectations, we find evidence for a direct effect of CEO ownership (negative) and CEO education (positive) on the use of objective performance evaluations and for a direct effect of the CEO’s internal locus of control on the use of subjective performance evaluations. Moreover, we provide evidence for a moderating role of both CEO ownership and education with respect to the influence of the CEO’s locus of control on the use of subjective evaluations. We use a sample of 247 small and medium-sized manufacturing firms to test our hypotheses.

Based on a panel of publicly listed firms in Kenya over the period of 2008 to 2014, we examined if Chief Executive Officer’s Characteristics affects capital structure. CEO tenure, CEO gender and CEO age and CEO education were used as independent variables while the capital structure was used as the dependent variable of the study. The study used upper echelon theory, trade-off theory and agency theory. Majorly, descriptive statistics, Pearson correlation analysis and panel regressions were performed. Panel regression analysis was used to determine the effect of CEO characteristics on capital structure. CEO tenure had a negative and significant effect on capital structure, CEO age had a positive and significant effect on the capital structure, CEO gender and CEO education indicated a negative and significant effect on capital structure respectively. The study indicates that there is an association between CEO characteristics and capital structure of listed firms in Kenya. It is therefore instrumental for firms to appoint their CEOs based on the duration they have served the company, CEOs to sit in their position for a longer period of time and those who have the requisite knowledge and experience hence they can be tasked with making important decisions pertaining firms' financing. Keywords: capital structure, CEO characteristics, Upper Echelon Theory, Trade-Off Theory, panel data and Agency Theory DOI: 10.7176/RJFA/11-18-07 Publication date: September 30 th 2020

This study examines the impact of the chief executive officer’s (CEO) ownership, education and origin on firm performance. The study uses balanced panel data for 6 years from 2011 to 2016 to run ordinary least square regression. Three variables that include the CEO origin, education and ownership are investigated in relation to firm performance. These characteristics are some of the basic CEO characteristics that are rarely considered by prior studies. The study uses a sample from firms in the financial sector listed on the Nigerian Stock Exchange from 2011 to 2016. The findings indicate that CEO education improves profitability. Similarly, stock performance gets improved when the CEO has prior experience of the firm before being appointed as the chief executive officer. The findings will be useful to shareholders in making an informed decision in selecting the right CEO to manage the firm. Further studies need to consider not only the CEO ownership, but also whether the interest in ownership makes them more powerful.

This study aimed to investigate the effect of corporate sustainability on financial performance as well as examine whether CEO characteristics influence the association between corporate sustainability and the financial performance of listed firms in the Saudi Stock Exchange. In this vein, this study is the first to utilize multiple CEO characteristics as a moderating role influencing the association between corporate sustainability and financial performance. In addition, the study focuses on the developing country of Saudi Arabia, which is one of the top oil producers in the world and is targeting to invest billions of dollars in renewable and sustainable energy projects according to Saudi Vision 2030. We primarily focused on ESG activities (environmental, social, and governance) and their impact on the return on assets and return on equity (employed as a proxy of financial performance). This study used the ordinary least squares (OLS) model to examine these associations as well as the system GMM to test for endogeneity problems. Using a sample of 1143 observations to represent the non-financial firms listed on the Tadawul All Share Index (TASI) for 9 years from 2014 to 2022, we found a negative and significant relationship between the activities of corporate sustainability and financial performance. Furthermore, we demonstrated that CEO characteristics (CEO busyness, CEO ownership, CEO education, CEO gender, and CEO tenure) exerted influence on the association between corporate sustainability and financial performance; that is, CEO busyness, CEO ownership, and CEO gender mitigated the negative influence of corporate sustainability on financial performance, whereas CEO education and CEO tenure made it worse. The results of this study have implications for regulators, firms, and stakeholders.

The purpose of this thesis is to examine the impact of CEO characteristics on Financial Conservatism, the moderating role of GDP Growth, and Interest Rate Spread. Financial Conservatism means a firm that is holding both high in cash holdings (cash conservative) and low in debt (debt conservative). 139 listed non-financial firm’s annual data, ranging from 2008 to 2017, is extracted from annual reports. The CEO characteristics consisting of CEO Age, CEO Duality, CEO Gender, CEO Tenure, and CEO Ownership are used as independent variables. GDP Growth and Interest Rate Spread are used as moderating variables and leverage is used as the control variable. The dependent variable is Financial Conservatism which is measured with net to debt ratio. The extracted figures are processed using panel data regression analysis under random effect assumptions. We use a logistic regression model for testing the hypothesis. The result shows that CEO Age and Tenure are linked with Financial Conservatism. The moderating effect of GDP Growth is negatively significant and Interest Rate Spread has a positive impact on Financial Conservatism (FC). Evidence shows that CEO Duality and Gender are not linked with Financial Conservatism. The moderating effect of GDP Growth is positively significant with CEO Duality and positively insignificant with CEO Gender but Interest Rate Spread has no relationship with Financial Conservatism. The additional analysis shows that CEO Ownership is negatively insignificant and linked with Financial Conservatism whereas GDP Growth is negatively significant but Interest Rate Spread moderates the link with Financial Conservatism. The current study encourages the benefit of industrial improvement by retaining the best mechanism in corporate governance. Thus, this study is beneficial for firms’ owners, managers, and investors, as Financial Conservatism firms are more cost-effective, low-risk investments and pay higher dividends than their non-conservative equivalents.

This study examines the association between CEO duality, CEO ownership and financial footnotes readability. The data were collected from 1,469 non-financial firms listed on the Indonesian Stock Exchange (IDX) between 2010 and 2018. Using ordinary least squares (OLS) regression, this study unveiled a negative and significant relationship between CEO duality and financial statement footnotes. In addition, the relationship between CEO ownership and financial statement footnotes is positive and significant. Furthermore, this indicates that CEO duality expands the embarrassment and provokes opportunistic behaviour from the CEO to prioritize personal interests by exploiting potential company resources to weaken the independence of the CEO. Hence, the readability of financial footnotes is undecipherable. On the other hand, CEO ownership is more responsible for improving corporate performance, so more financial statement footnotes are readable. Therefore, this study contributes to the literature on seeking the understanding of the readability of a firm's written communication in emerging countries.

The purpose is to explore whether the CEO’s personal and professional attributes affect corporate social responsibility (CSR) disclosure or not in particular context of Pakistan. This article attempts to bridge this gap using the data set of 1,790 firm-year observations comprising of firms listed at the Pakistan Stock Exchange. For this purpose, the logistic regression technique is employed while taking CEO personal and professional attributes as explanatory variables and CSR disclosure as the dependent variable. Results indicate that firm size and CSR disclosure has a positive relationship. The outcomes based on binary logistic regression demonstrate that CEO ownership has a negative impact, whereas CEO tenure, CEO education, CEO age, and CEO compensation are the variables that have a positive impact on CSR disclosure. In addition, duality, ownership, and gender of the CEO are found to be insignificant. Evidence on CEO demographics and their impact on disclosure choice might be helpful for policymakers and regulators. This study lacks generalization due to the unique setting of Pakistan. Our research contributes to the body of knowledge containing upper echelons theory in several ways. First, it answers the call for an extension of research toward social responsibility disclosures and individual’s traits impact on it. Second, our study adds to the scarce literature available on CSR research and practices in developing countries. Third, it is one of the first quantitative studies in the specific context of Pakistan as data for these variables is not available in organized form publicly.

This study investigates the relationship between CEO characteristics and firm performance across emerging and developed economies using both panel regression and machine learning techniques. Drawing on Upper Echelons Theory, we examine whether CEO age, tenure, gender, founder status, and appointment origin influence Return on Assets (ROA), Return on Equity (ROE), and market-to-book ratio. We apply the fixed and random effects models for inference and deploy random forest and XGBoost models to determine the feature importance of each CEO trait. Our findings show that CEO tenure consistently predicts improved ROE and ROA, while CEO age and founder status negatively affect firm performance. Female CEOs, though not consistently significant in the baseline models, positively influence market valuation in emerging markets according to interaction models. Firm-level characteristics such as size and leverage dominate CEO traits in explaining performance outcomes, especially in machine learning rankings. By integrating machine learning feature importance, this study contributes an original approach to CEO evaluation, enabling firms and policymakers to prioritise leadership traits that matter most. The findings have practical implications for succession planning, diversity policy, and performance-based executive appointments.

CEO's personal characteristics, ownership and investment cash flow sensitivity: Evidence from NYSE panel data firms

The study examined the moderating effect of independent directors on the relationship between Chief Executive Officers characteristics and performance of listed deposit money banks in Nigeria. Ex-post facto research design was used and panel data was collected from the audited annual financial statements of thirteen listed DMBs in Nigeria for a period of 2014-2022. Generalized Least Squares (GLS) method of Panel Regression, Fixed and Random Effects was employed in its estimations with the aid of STATA Software Version 14. Performance is dependent variable proxied by Return on Assets and Tobin’s Q, the independent variable is CEO characteristics proxied by CEO tenure, CEO gender, CEO age, CEO educational level, CEO financial expertise, CEO duality, CEO political connection and CEO ownership, the moderating variable is independent directors while board size and bank size are the control variables. The study found that CET, CEG, CEE, CFE, CPC, IDD and CEO have significant positive effect on banks performance, CEA has significant negative effect on banks performance while CED has non-significant positive effect on performance of listed DMBs in Nigeria. Also, the study found that independent directors did not only have a positive and significant direct effect on bank performance, but it also moderates the relationship between CEO characteristics and DMBs performance. However, the study recommends that Central Bank of Nigeria should make it mandatory for DMBs in Nigeria to have a board majorly composed of independent directors since their presence on board strengthens the relationship between CEO characteristics and banks performance.

CEO traits are a determining factor for the performance and profitability of deposit money banks, especially in developing economies like Nigeria where leadership trends dictate company success. This study investigates how CEO attributes influence the profitability of Nigerian deposit money banks on the Nigerian Exchange Group (NGX). An ex post facto design was employed with secondary data collected from the annual reports of 20 purposively sampled deposit money banks over the period 2015 to 2023. CEO attributes such as ownership, origin, gender, nationality, and tenure were used as independent variables, whereas return on assets (ROA) served as the profitability measure. Content analysis based on the Integrated Internal Reporting Framework (IIRF) 2021 informed the process of data extraction. Panel regression was applied to explore the relationship between CEO attributes and profitability, with firm size and age controls. The results show that CEO ownership, origin, gender, nationality, and tenure have a significant relationship with bank profitability (p < 0.05), with CEO ownership and tenure having especially strong positive relationships. Firm age also had a negative influence on profitability, which indicates older bank-related problems. The model explained approximately 24.1% of profitability variance (R² = 0.241). The findings identify the strategic CEO characteristics' contribution to enhanced financial performance. To conclude, the study confirms that CEO characteristics significantly influence Nigerian deposit money banks' profitability and offers practical implications for regulators and stakeholders who are interested in improving leadership recruitment and governance for improved bank performance.

This study aims to explore the role of CEO political connections in moderating the relationship between CEO characteristics and financial performance in Indonesia's energy sector. Using a sample of 73 energy companies listed on the Indonesia Stock Exchange from 2020 to 2024, the study collects secondary data on CEO tenure, age, education, and political connections. Multiple regression analysis with the Fixed Effect model was used to test the hypotheses. The results show that CEO education has a significant positive impact on financial performance, measured by Return on Assets (ROA). CEO political connections were found to strengthen the relationship between CEO education and company financial performance. In contrast, CEO tenure and age did not have a significant effect on financial performance. These findings suggest that in Indonesia's dynamic and heavily regulated energy sector, CEO education is a crucial factor in improving financial performance, especially when supported by political connections that provide access to strategic resources. Political connections also weaken the impact of CEO age on performance but enhance the positive effect of CEO education. This study contributes to the literature by highlighting the interaction between CEO characteristics and political connections in the highly regulated energy sector in Indonesia, emphasizing the importance of adaptive leadership strategies in navigating regulatory challenges.

This research investigated the determinants on CEO compensation of firms listed on the Vietnamese stock market. The data included 187 non – financial companies listed in the period from 2012 to 2015. The main analysis method of this research was Generalized Method of Moment. The results showed a significant positive relationship between firm performance and CEO compensation. The results also showed a significantly positive relationship between company size and CEO compensation. Other factors were also found to have a positive impact on CEO compensation such as foreign ownership, CEO tenure and CEO education. However, there was no evidence on the effect of private ownership, state ownership, CEO age, CEO ownership and CEO duality on CEO compensation.

CEO characteristics and R&D expenditure of IPOs in emerging markets: Evidence from Taiwan

Purpose CEOs play a central role in the digitization of firms. However, the impact of CEO characteristics on digital transformation has typically been examined in isolation, without consideration of their combined effects. The purpose of this paper is to examine the combined influence of CEO characteristics on digital transformation. Design/methodology/approach Using the panel data of the listed manufacturing firms in China from 2007 to 2022, this paper conducted the fuzzy set qualitative comparative analysis to test the proposed hypotheses. Findings The research results demonstrate that digital transformation depends on a complex combination of CEO characteristic (CEO gender, CEO age, CEO education and CEO duality) and firm characteristics (firm size, firm age, firm leverage and state ownership). In particular, the first kind of combination is CEO education*CEO age*CEO duality, which is appropriate for firms that are larger, older and high leverage. The second kind of combination is ∼CEO education*CEO age*∼CEO gender, which is appropriate for firms that are older and state-owned. Originality/value This paper makes the following contributions. Firstly, this paper contributes to upper echelon theory by examining the combined effect of CEO characteristics on digital transformation. Secondly, this paper contributes to the digital transformation literature by identifying multiple valid combinations of CEO characteristics that drive the digitization of a firm. Thirdly, this paper also contributes to upper echelon theory by identifying the contingent context of the combinations of CEO characteristics. The research results also provide important practical implications. Firstly, firms seeking to achieve digital transformation ought to use a comprehensive approach when selecting and hiring CEOs. Secondly, for policymakers, they should to pay attention to differentiated supervision of different firms since the optimal combination of CEO characteristics will vary from one firm to another.