Nascent social ventures’ inaugural CEO appointment: human capital and gender expectancy violation perspectives

Research SummaryWe examined whether or not directors' prior experiences with Chief Executive Officer (CEO) selection helps them to choose a higher‐performing CEO. Using S&P 1500 firms from 1999 to 2020, we found that boards' prior experiences with hiring CEOs do not improve their ability to choose a higher‐performing CEO; rather, their prior CEO selection experience has a small but consistent negative effect. At the same time, we found little evidence that the domain specificity of prior CEO succession experience impacts the performance of subsequently hired CEOs. Overall, we suggest that our pattern of results is suggestive of superstitious learning by directors.Managerial SummaryOur findings suggest that boards with more experience hiring new CEOs tend to select CEOs who exhibit slightly lower performance. This finding is an important addition to recent research in this area that theoretically and empirically demonstrates why and how boards may find it difficult to be effective. The economic magnitude of our findings is relatively small, however. It does not appear that more experience with hiring CEOs is associated with boards making dramatically worse CEO selections. Instead, the magnitude of our findings suggests that greater experience with hiring CEOs leads boards to select new CEOs who perform slightly worse and that this negative effect persists when we consider domain specificity (e.g., the context of prior hiring experience).

We examine how chief executive officer (CEO) narcissism influences the interorganizational imitation of corporate strategy. We theorize that narcissistic CEOs are influenced more by the corporate strategies they experienced on other boards and less by the corporate strategies experienced by other directors. These effects are strengthened if the other firms to which the CEO has interlock ties have high status and if the CEO is powerful. Through longitudinal analyses of Fortune 500 companies’ decisions (from 1997 to 2006) related to the acquisition emphasis of a firm’s growth strategy and the firm’s level of international diversification, we show that narcissistic CEOs are influenced by corporate strategies that they witnessed at other firms much more than other CEOs. In addition, relatively narcissistic CEOs not only strongly resist the influence of other directors’ prior experience but also tend to demonstrate their superiority by adopting corporate strategies that are the opposite of what fellow directors’ prior experience would suggest. Our theory and results highlight how CEO narcissism limits directors’ influence over corporate strategy and influences CEOs’ learning and information processing in making strategic decisions.

Maureen Swick, RN, MSN, PhD, NEA-BC

The physical attractiveness stereotype maintains that what is beautiful is good. Does this also apply to Chief Executive Officers (CEOs) and influence their compensation? There are numerous debates on CEO compensation, and scholars have long been interested in understanding the factors that impact CEO compensation. Of the empirical studies investigating the antecedents of CEO compensation, little attention has been paid to CEO facial attractiveness. Drawing mainly from the physical attractiveness stereotype, we argue that CEO attractiveness increases CEO compensation, and the effect becomes stronger when the CEO has worked as a CEO in other firms, but weaker when the CEO is female or works for a high‐technology firm. We tested our hypotheses by coding facial attractiveness for all CEOs in S&P 500 firms over 10 years (861 CEOs and 4,395 firm‐year observations). Results partly support our predictions and show that the effect of CEO facial attractiveness on compensation is not only robust but also economically significant. Moderating effects were found using prior CEO experience and high tech industry as moderators. However, we found no moderating effect of CEO gender on the relationship between CEO facial attractiveness and compensation. This study suggests that CEO compensation is not an entirely rational process, and compensation committees appear to be biased in favor of beautiful individuals.

The article reports the findings of a pathbreaking national study that examines executive compensation in American environmental nonprofits. This article seeks to accomplish two goals: (1) examine the gender disparities in the pay of chief executive officers (CEOs), executive directors, and presidents in environmental organizations; and (2) analyze the ethnic/racial differences in the wages of the top executive in said nonprofits. The study uses financial information from Internal Revenue Service Form 990 to examine top executive salaries in 2,703 organizations. The author collected data from tax forms filed between 2018 and 2020. The article examines how gender and race/ethnicity are associated with compensation. It also analyzes how region, organizational type, urbanization, organizational revenue, staff size, the board size, the receipt of bonuses and incentives, the size of the bonuses/incentives, and the size of the base wages are related to overall compensation. Men occupied 51.2% (1,383) and women 48.8% (1,320) of the top executive positions in the organizations studied. Whites dominate the CEO position, that is, 92% or 2,488 of the CEOs were White, and 8% (215) were people of color. The study found significant gender pay gaps. While the median compensation for men was $117,468, it was $88,568.50 for women. Hence, women CEOs earned 75.4% of what men were paid. There was also an ethnic/racial pay gap. The study found that White CEOs earned a median income of $102,801. The median wage for Asian CEOs was 97.6%, Black CEOs was 96%, Latinx CEOs was 80.8%, and Native American CEOs was 73.4% of what White CEOs earned. White men obtained the highest median compensation of all gender, and racial/ethnic groups studied. The total compensation also varied by region, organizational revenues, organizational type, level of urbanization, staff size, board size, receipt of bonuses and incentives, the size of bonuses/incentives, and size of base wages. The size of the organization’s revenue, whether a CEO received bonuses/incentives, region, the CEO’s race/ethnicity, the CEO’s gender, and size of the staff were significant factors in the multivariate regression model.

Product innovation is an important research topic that has stimulated significant interest among management scholars and practitioners. Leadership has been suggested to be a critical factor affecting product innovation. Numerous studies have documented that transformational leadership positively influences product innovation performance, which is conceptualized as the degree to which a new product and/or service has achieved its market share, sales, rates of asset return, rates of investment return, and profit objectives. However, there is a lack of studies examining the specific means through which transformational leadership influences product innovation performance at the firm level. Therefore, this study aimed to investigate the processes through which such effect is achieved and to determine whether corporate entrepreneurship and technology orientation as intervening factors influence this effect. To test the hypotheses, data were collected from 151 matched top management team (TMT) members and chief executive officers (CEOs) from Chinese manufacturing firms. Two separate questionnaires were used to collect the data. TMT members’ questionnaire included measures of CEO's transformational leadership, whereas CEOs’ questionnaire included questions about corporate entrepreneurship, technology orientation, and product innovation performance. Hierarchical linear regression was used to test the hypothesized effects. The results of the analysis provided the support for the fully mediating role of corporate entrepreneurship on the relationship between CEOs' transformational leadership and product innovation performance. In addition, technology orientation was found to significantly moderate the CEOs' transformational leadership–corporate entrepreneurship linkage. Furthermore, the mediated moderation effect of corporate entrepreneurship on the relationships among CEOs’ transformational leadership, technology orientation, and product innovation performance was significantly supported. By studying leadership among CEOs, this study contributes to the research by elucidating the mechanisms through which transformational leadership influences product innovation performance. The mediating role of corporate entrepreneurship encourages managers to improve their leadership style so as to enhance the development of corporate entrepreneurship and innovation practices. The findings also show that technology orientation provides the conditions for the smooth translation of the CEO's transformational leadership into actual entrepreneurial activities. Hence, firms should prioritize technology orientation to optimize the implementation of transformational leadership so as to emphasize innovation and new venture creation.

We examine whether the stronger information content of Chief Financial Officer (CFO) insider trading relative to that of Chief Executive Officers (CEOs) results from a different willingness to exploit the information asymmetry that exists between executives and outside shareholders (scrutiny hypothesis) or from differing financial acumen between CFOs and CEOs (financial acumen hypothesis). We consider the information content of equity purchases for CEOs and CFOs. We examine purchased-based insider trading portfolio returns before and after the implementation of SOX in firms with high versus low regulation, for routine and opportunistic managers, and in samples of CEOs with prior CFO experience. We provide evidence that SOX affected executives differently and provide support for the scrutiny hypothesis. CFO-based portfolios remain the most profitable post-SOX, but the magnitude of returns has fallen in absolute and relative terms compared to returns for CEOs. Superior financial acumen of CFOs does not appear to be supported. CEO purchase trade returns appear to be lower than CFO returns because CEOs face greater visibility and scrutiny and thus limit their own trading aggressiveness.

We surveyed the chief executive officers (CEOs) of US hospitals and health care systems to determine (1) how they came to be CEO [career path], (2) why they chose to...

Does a CEO's prior academic experience helpful to an IPO firm? The case of IPO discount

PurposeThe paper aims to investigate how the social entrepreneurial intention antecedents directly and indirectly affect social entrepreneurial intent. The participants of the study were Filipino and Indonesian university students from selected higher education institutions (HEIs).Design/methodology/approachA quantitative research design was used and partial least square-structural equation modeling was used to measure the direct and indirect effects of the structural model.FindingsThe results revealed that prior experience with social problems positively and significantly affects empathy, moral obligation, social entrepreneurial self-efficacy and perceived social support. Moreover, it was also found that social entrepreneurial self-efficacy and perceived social support positively and significantly affect social entrepreneurial intent, and these two antecedents mediate the positive relationship between prior experience with social problems and social entrepreneurial intent.Research limitations/implicationsAs the present study only examined social entrepreneurial intentions among Filipino and Indonesian university students, other researchers may test the framework in another locale. Others may find interest in identifying the significant difference in social entrepreneurial intent among between or among nations.Practical implicationsThe findings of the present study can benefit HEIs in terms of offering social entrepreneurship programs and courses. The role of HEIs is truly important. Providing an avenue for students for them to be socially entrepreneurial and empowering them to be future social entrepreneurs can truly help in sustainably promoting social entrepreneurship. These can be done by designing relevant learning materials and requirements that will permit students to be social venture creators.Social implicationsBased on this study, if these students were exposed to social entrepreneurship activities during their university life (prior experience), then the propensity for them to be social venture creators in high. With the myriad problems in the Philippines and Indonesia, exposure to social problems is evident. Through proper inculcation of social entrepreneurial spirit, Filipino and Indonesian students will greatly create massive impact in the landscape of Asian social entrepreneurship.Originality/valueThe present study offers a new perspective on social entrepreneurial intentions, as it is in Asian setting. It also provides a viewpoint where only social entrepreneurial self-efficacy and perceived social support positively affect social entrepreneurial intent and, at the same time, act as mediators between prior experience with social problem and social entrepreneurial intent. With these results, it enriches the theoretical foundations of social entrepreneurship.

This research aims to examine how the prior experiences of the chief executive officer (CEO) and board influence the focal firm’s Corporate Social Responsibility (CSR) activities. Further, the present study examines how CEO overconfidence influences the diffusion of CSR activities. The authors theorize that overconfident CEOs are influenced more by the corporate strategies they experienced on other boards and less by the corporate strategies experienced by other directors. Through longitudinal analyses of the CSR profiles a sample of S&P 500 companies for the period 2006-2013, the study shows that CEO and board prior CSR experience are positively related to the firm’s current CSR activities. The authors find a significant positive moderating effect of CEO overconfidence on the relationship between CEO prior CSR and the focal firm’s CSR. The theory and results highlight how CEO and board prior CSR exposure may influence the focal firm’s stances toward CSR and that CEO overconfidence may have differential effects on these relationships.

PurposeExecutive isolation, also known as workplace loneliness, its factors and impact are major issues for organizational development, future of work for leadership and learning culture. The purpose of this study is to examine the Executive isolation phenomenon where relationships between power distance, organizational culture and executive isolation of Chief Executive Officers (CEOs) are analysed on how it is considered by their teams. The same is contextualized through the inputs received through interviews conducted with CEOs and employee surveys.Design/methodology/approachThe qualitative in-depth interviews of five CEOs, and survey across 34 of the 50 employees, were undertaken over the course of two phases of this study. The investigation focused on identifying executive isolation of CEOs and perspectives of employees that can impact the leadership and learning progress of organizations based on work culture, power distance and decision-making; awareness and experience of executive isolation; workplace friendliness and rejection; and management development initiatives to minimize the impact of executive isolation. Qualitative data analysis was conducted using MAXQDA 2022 (Verbi Software, Berlin, Germany), which is a qualitative data analysis software.FindingsThe findings highlight and expose the significant gap between understanding and analysing of the factors due to which the CEOs undergo executive isolation. It also extends to providing details related to the lack of awareness of the teams’ actions contributing to the CEOs’ isolation. It further highlights the fact that the difference of perspectives between the CEOs and teams leads to the organization slowing in its learning activities due to the leaders’ own challenges of executive isolation The findings also provide immense need of developing knowledge assets and management development initiatives for learning interventions, to help understand, analyse and mitigate executive isolation, in the interest of the organizational learning and development.Originality/valueEarlier research work have contextualized the executive isolation impact on CEOs ability to be a leader. This study extends it to include the implications of leadership and learning culture on the teams that are affected by organization culture, power distance, decision-making and analysing the gap between the understandings about executive isolation of the CEOs. Eventually, it interprets how CEOs courting the executive isolation impacts the overall developmental culture of the organization. This will help in asserting the serious need of new learning frameworks needed to minimize the impact of CEO-level executive isolation.

To date, the effect of the specific type of prior work experience of chief executive officers (CEOs) on innovation and firm performance remains poorly understood. Using upper perspective theory, this study argues that CEOs’ academic work experience affects firms’ innovation output, which in turn determines how research and development (R&D) activities affect firm performance. Analyzing a sample of 1210 Chinese publicly traded firms from 2013–2017, we found that firms with CEOs who were previously associated with universities or research institutions had better innovation output and performance than firms led by CEOs without such background. In addition, we found that former academics spent more on R&D investment, resulting in lower firm performance compared to firms that were not led by CEOs with an academic background. Furthermore, the innovation output was even higher, and performance was inversely reduced for ventures where state ownership is significant.

This paper explores how prominent venture capitalists (VCs) affect chief executive officer (CEO) replacement in startups. Defining prominence using eigenvector centrality, we use matching methods and instrumental variables to show that startup CEO replacement occurs more often and faster when prominent VCs participate. We further explore these VCs’ comparative advantage in managing CEO turnover, finding that the prominent VC effects increase as replacement costs rise, such as when incumbent CEOs are entrenched or possess specialized technology know-how, or when startups are in an early stage. When prominent VCs participate, replacement CEOs are disproportionately experienced outsiders—external hires who possess prior startup CEO experience. Our results reveal that CEO turnover is associated with increases in startups’ ex post innovation and survival performance, with experienced outsider CEO replacements showing the strongest survival rates. This paper was accepted by Gustavo Manso, finance.

Purpose – The authors examine whether the stronger information content of chief financial officer (CFO) insider trading relative to that of chief executive officers (CEOs) results from a different willingness to exploit the information asymmetry that exists between executives and outside shareholders (scrutiny hypothesis) or from differing financial acumen between CFOs and CEOs (financial acumen hypothesis). The authors consider the information content of equity purchases for CEOs and CFOs. The paper aims to discuss these issues. Design/methodology/approach – The authors examine purchase-based insider trading portfolio returns before and after the implementation of SOX in firms with high versus low regulation, for routine and opportunistic managers, and in samples of CEOs with prior CFO experience. Findings – The authors provide evidence that SOX affected executives differently and provide support for the scrutiny hypothesis. CFO-based portfolios remain the most profitable post-SOX, but the magnitude of returns has fallen in absolute and relative terms compared to returns for CEOs. Superior financial acumen of CFOs does not appear to be supported. CEO purchase trade returns appear to be lower than CFO returns because CEOs face greater visibility and scrutiny and thus limit their own trading aggressiveness. Originality/value – This research contributes to the literature in explaining why CFOs best CEOs in their insider trading purchases and documents that in the post-SOX period, CFO insider trading superiority disappears.