Trends and Financial Variations in Executive Confidence: A Decade-Long Analysis

PurposeBased on Upper Echelon Theory, the present study is an endeavor to assess the relationship between Chief Executive Officer (CEO) confidence and the performance of a firm. This study also investigates the moderating role of board independence in this context.Design/methodology/approachThis work is based on a sample of 500 S&P-indexed Indian firms listed on the Bombay Stock Exchange over a time span of 12 years, i.e. from 2010 to 2021. Panel regression models are employed on a final sample of 3,780 firm-year observations to examine the aforesaid relationship.FindingsThe empirical findings of the study support the positive association between CEO confidence and firm performance as highly confident (overconfident) CEOs tend to make quick and intuitive decisions, alleviate the firm's underinvestment problem, and have a higher propensity to boost the overall firm performance. Moreover, the results reveal that the presence of independent directors (IDs) negatively moderates this relationship and reduces the positive impacts of CEO overconfidence as IDs lack the required knowledge of the business. IDs themselves tend to assume the imperative position and reject the CEO's proposals, thereby negatively impacting the firm performance in the long run.Originality/valueThe current study provides significant novel insights into the finance and strategic management literature that overconfidence bias among CEOs can be a desirable managerial trait for shareholders to boost the long-term performance of the firm. The study also extends to the corporate governance literature by providing empirical evidence of IDs reducing the potential beneficial effects of CEO overconfidence and that subsequently decreases the firm performance.

The COVID-19 pandemic has caused hundreds of thousands of deaths in the U.S. As chief strategists of their respective firms, how do Chief Executive Officers (CEOs) react to mortality salience associated with the number of new daily COVID deaths in the U.S.? To answer this question, we integrate terror management theory (TMT) with regulatory focus theory to examine how CEOs respond to mortality salience. Based on a sample of CEOs of S&P 500 firms, we found that mortality salience was associated with CEOs' increased other-orientation, and this association was more pronounced among those with high prevention focus. Mortality salience also was associated with CEOs' decreased self-orientation, particularly among those with high promotion focus. We also found that CEOs' self-orientation was negatively related to the likelihood of their firms' making community donations. (PsycInfo Database Record (c) 2021 APA, all rights reserved).

Purpose This paper aims to examine the impact of chief executive officer (CEO) attributes on foreign shareholdings from the perspective of an emerging economy. Design/methodology/approach This study examined Bombay Stock Exchange listed firms from the Indian stock market and applied a balanced panel data approach with fixed effect estimation technique during the period 2010–2019. Findings The study shows that CEOs’ financial education and a higher level of education positively affect foreign shareholdings. The age and experience of CEO have a positive and significant impact on foreign shareholdings. Firms with male CEOs are preferred more by foreign investors. The effect of CEO busyness and CEO duality is negative on foreign shareholdings. Foreign investors prefer to invest in firms with foreign nationality CEOs. Furthermore, the robustness test reveals that the influence of CEO attributes on foreign shareholdings is stronger for new, small and stand-alone firms than for old, large and group-affiliated firms. Practical implications The study will be beneficial for a diverse audience ranging from firms’ board of directors, regulators and policymakers who are entrusted with the CEO recruitment process. Additionally, firms seeking external financing should disclose CEO information adequately and improve the reporting quality to attract foreign investors, as they consider CEO characteristics as a valuable signal before making investment decisions. Originality/value In light of the current legislative reforms, this study can be recognized as one of the early studies that explore the relationship between CEO attributes and foreign shareholdings in the context of an emerging economy.

This paper examines the social media content of a woman Indian chief executive officer (CEO) in her communication in the public space. The active involvement of CEO in communication activities influences the business effectiveness, performance, and standing of the business headed by her. The emerging social media has become an essential strategic tool from “buzz word” with more popularity among businesses and creates great opportunities for communication efforts both for corporate and personal use of CEO. For this study, Tweets posted on Twitter, a micro-blogging social media platform, by an Indian woman CEO are used for analysis. Rstudio and Nvivo were used for tweets extraction and analysis. The findings show the various themes in CEO's communication which are categorized in different sectors. The tweets are limited to business sector; it also includes the personal (feelings and status updates), political views and social concerns (ranging from water scarcity, education, illiteracy, women empowerment, need for improved governance, policy support). The paper extends the theoretical and empirical arguments for the importance of CEOs' social media communications. Finally, this research suggests that with a well-planned and strategic social media use, CEOs can create value for themselves and their businesses.

The reciprocal interlocking of chief executive officers (CEOs) is a non-trivial phenomenon of the composition of boards of directors and of corporate governance: among large companies in 1991, about one company in seven was part of a relationship whereby the CEO of one company sat on a second company's board and the second company's CEO sat on the first company's board. We are aware of no previous efforts to explain these reciprocal relationships. We hypothesize that reciprocal CEO interlocks are (a) more likely when a board has more outside directorships, (b) less likely when a CEO has more of his total annual compensation paid in the form of stock options, (c) less likely when a company's board is more active and holds more meetings, (d) less likely when a CEO has a larger ownership share of his company, and (e) more likely when there are more CEOs from other companies as outside directors on a CEO's board. Using a sizable sample of large companies in 1991, we employ simple probit and step probit models to test these hypotheses, with the use of control variables that encompass other company, board, and CEO characteristics. These multivariate analyses support our first three conjectures but do not support the remaining two. Since there is considerable academic and policy debate concerning board composition and the effectiveness of interlocking directorships in general, investigations focusing on reciprocal CEO interlocks, which link the highest ranked executives of two different firms, represent a significant contribution to the knowledge base in this field.

This study aimed to connect the behavioral corporate finance perspective (micro level) with complexity theory via agent-based modeling to analyze the impact of selected psychological factors of chief executive officers (CEOs) on stock market volatility (macro level). Specifically, we wanted to explore whether Polish CEOs’ subjective well-being (SWB) influenced their managerial decisions during the COVID-19 pandemic and how it might be related to the volatility of stock prices during this critical period in Poland. Our study was based on a survey of Polish CEOs who managed companies listed on the Warsaw Stock Exchange. In particular, 255 CEOs completed the Satisfaction with Life Scale, the Positive and Negative Affect Scale, and a business survey on the impact of the COVID-19 pandemic on company management. Using the results of this survey, we built an agent-based model to investigate how CEOs’ decision-making, stemming from their SWB levels, influences the perception of prices by individual traders and, in turn, how it is translated into aggregate stock market volatility. The results indicate the pathways through which the microscopic-level SWB of CEOs influences market price formation at a macroscopic level. The findings obtained from our model may shed new light on the rational expectations theory applied to stock market volatility during the financial crisis.

The COVID-19 pandemic had a profound impact on business leadership, specifically on chief executive officers (CEOs). To document the psychological impacts of the pandemic on corporate leadership, this study analyzed the language of CEOs during company quarterly earnings calls (N = 19,536) one year before and after the onset of the pandemic. Following the start of lockdowns, CEOs exhibited significant language shifts. Analytic thinking declined, and their language became less technical and more personal and intuitive. CEOs also showed signs of increased cognitive load as they grappled with the pandemic's impact on their business practices. The study observed a substantial decrease in collective-focused language (we-usage) among CEOs, indicative of disconnection from their companies. Concurrently, there was an increase in self-focused (I-usage) language, suggesting heightened preoccupation among business leaders. The observed language changes reflect the unique effect of the pandemic on CEOs, which had some notable differences compared to the general population. This study sheds light on how the COVID-19 pandemic influenced business leaders' psychological states and decision-making strategies-processes that have a substantial impact on a company's performance. The findings underscore the importance of language data in understanding large-scale societal events.

This chapter examines the social media content posted by a woman Indian chief executive officer (CEO) on Twitter. The active involvement of CEO in communication activities influences the business effectiveness, performance, and standing of the business headed by her. Rstudio and Nvivo, two analytical tools, were used for different analysis such as tweets extraction and content analysis. The findings show the various themes in CEO communication which are categorized in different sectors in terms of her personal views (feelings and status updates), political views, and social concerns (ranging from education, women empowerment, governance, and policy support). The chapter extends the theoretical and empirical arguments for the importance of CEOs' social media communications. Finally, this research suggests that with a well-planned and strategic social media use, CEOs can create value for themselves and their businesses.

This chapter examines the social media content posted by a woman Indian chief executive officer (CEO) on Twitter. The active involvement of CEO in communication activities influences the business effectiveness, performance, and standing of the business headed by her. Rstudio and Nvivo, two analytical tools, were used for different analysis such as tweets extraction and content analysis. The findings show the various themes in CEO communication which are categorized in different sectors in terms of her personal views (feelings and status updates), political views, and social concerns (ranging from education, women empowerment, governance, and policy support). The chapter extends the theoretical and empirical arguments for the importance of CEOs' social media communications. Finally, this research suggests that with a well-planned and strategic social media use, CEOs can create value for themselves and their businesses.

This study examines the relationship between chief executive officer (CEO) duality and sustainability reporting based on 200 companies listed on the Bombay Stock Exchange (BSE) from 2018 to 2023. Secondary data from corporate governance, sustainability, and annual reports were analyzed using content analysis based on the GRI-G4 framework. The findings revealed that, on average, firms disclosed 72 percent of the G4 elements. Regression analysis showed that CEO duality has a significant negative impact on sustainability disclosures, supporting the idea that concentrated leadership power reduces accountability and transparency. This study contributes to agency theory, highlighting the benefits of separating the roles of CEO and chairperson for improved governance and disclosure quality. For corporate managers, the results suggest that leadership structures should avoid consolidating power in one individual to foster transparency and stakeholder trust. For policymakers, the study underscores the importance of regulations like the role separation rule of the Securities and Exchange Board of India (SEBI) to address governance risks and support credible sustainability reporting.

This study aims to examine the influence of chief executive officer (CEO) characteristics (i.e., CEO innovativeness, CEO information system (IS) knowledge, and CEO trust in technology) on accounting software technology use in Jordanian companies from different industrial sectors. Data were gathered through a structured questionnaire distributed to CEOs/owners of small, medium, and large companies in Jordan. The Partial Least Squares Structural Equation Modeling (PLS-SEM) technique was employed on 315 usable questionnaires received. The finding reveals that CEO IS knowledge and CEO trust in technology have a significant positive impact on accounting software use. Surprisingly, CEO innovativeness has an insignificant impact on accounting software use due to the prevalence of avoiding uncertainties in undertaking a new system. The outcomes of this study can assist the government in devising relevant policies and support initiatives to encourage firms to adopt accounting software technology. Similarly, CEOs can benefit significantly from gaining a deeper understanding of the principal factors influencing accounting software use.

Why do chief executive officers (CEOs) seek media appearances and what benefit do they gain from it? Using a sample of 2,666 U.S. firms from 1997 to 2009, we found that a CEO’s appearance in CNBC interviews and major news articles has a positive relationship with his or her compensation in the following year, after controlling for firm performance and other confounding factors. We further found that the positive relationship is weaker when the CEO is with a large company and is stronger when the CEO is with a company demonstrating strong stock market performance. Finally, we found that when the CEO has a high equity ownership or is a founder CEO, the positive relationship disappears.

PurposeThe current study qualitatively examined the challenges and lessons learned from Chief Executive Officers (CEOs) during the COVID-19 pandemic. The current study draws upon previous crisis leadership research to understand and classify the most important lessons learned from CEOs.Design/methodology/approachA total of 30 in-depth, structured CEO interviews were conducted with large, multi-divisional organizations across market sectors that included healthcare, automotive, steel, agriculture, logistics, distribution, banking, financial services, light manufacturing and industrial services during the COVID-19 pandemic. Three separate judges performed a content analysis, and three main themes (eleven overall lessons) emerged related to high-level leadership lessons learned through the pandemic.FindingsThe leadership lessons that emerged overwhelmingly focused on the importance of emphasizing leadership fundamentals during crisis. CEO’s shared the importance of getting “back to basics” during the pandemic. The current study presents these leadership lessons, along with insights for leadership practices and development, as well as future research. Additionally, questions for reflection are posed to stimulate current and future leaders’ growth and development.Originality/valueThe COVID-19 pandemic has impacted leadership and organizations in an unprecedented manner. Previous research has outlined the leadership traits and behaviors needed to successfully lead through organizational crises. However, little research has examined CEO level lessons learned, focusing on learning from such crises.

PurposeBorderline firms whose bond rating has a plus or minus specification by a rating agency face a greater potential for an upgrade or downgrade by the agency. The authors examine the level of chief executive officer (CEO) power in firms with a plus or minus bond rating. The authors test whether CEOs of these firms become more or less powerful, along with the effect of corporate governance and existing bond rating.Design/methodology/approachThe authors use a panel sample with 16,429 observations from 1992 to 2016 from the ExecuComp database.FindingsThe authors find that CEOs of borderline-rated firms tend to be less powerful, relative to firms with a non-proximate rating. This result is largely present in firms with a plus rating. The authors also find that our primary findings are mainly driven by firms with low bond ratings (i.e. below investment grade) or by firms with weak corporate governance. Lastly, the authors document that CEO personal characteristics (i.e. CEO age, gender and tenure) impact our findings.Research limitations/implicationsFirst, firms in our sample are large public companies, and the external validity of our results to smaller firms that may also be private is unknown. Second, the Compustat database discontinued reporting bond rating data (i.e. S&P bond ratings) in 2017. Hence, the authors are unable to analyze the CEO power of borderline firms in years after 2016.Practical implicationsThe study contributes to the larger debate on whether having powerful CEOs is beneficial to an organization or not, because prior research has examined the consequences of CEO power with mixed results. The authors document evidence to support the research stream that links CEO power to negative consequences.Social implicationsThe authors find that our primary results are enhanced in firms with weak corporate governance, which is consistent with prior research that finds effective governance may mitigate CEO power and agency problems between the CEO and the Board.Originality/valuePrior research primarily uses CEO power as a driver for performance. Our study focuses on CEO power as a dependent variable, with the bond rating change proximity as a driver of CEO power. The authors believe that this helps develop a more comprehensive understanding of CEO power.

The risk-mitigating role of corporate social responsibility in Chinese listed heavy-polluting companies: An extreme event experience perspective