CEO Age Research Articles

How Much Does the CEO’s Age Impact Corporate Performance Under a Changing Environment?

The recent technological innovations and the consequences of the pandemic are rapidly changing the management paradigm. Organizations that seek to survive and remain competitive must adapt to these changes. One strategy to cope with these environmental changes is to hire a younger CEO. This study aims to empirically analyze how the age of the CEO affects the performance of the firm based on upper echelons theory. Using a sample of 706 CEOs of companies listed on the South Korean public stock market (KOSPI) as of 2023, we found that CEO age is positively related to financial performance. We also found that CEO age is negatively related to risk-taking behavior and innovation. These findings have both practical and theoretical implications, suggesting that the recent shift to the relationship between a long-term perspective and innovation have positive implications. Young CEOs often seek these perspectives and are more willing to be aggressive in investment and risk-taking behaviors in the interests offor an innovative business.

The Role of CEO Characteristics in Enhancing Carbon Emission Disclosure: Evidence from Indonesia

This study aims to investigate the influence of CEO characteristics, namely gender, age, and education level, on the disclosure of carbon emissions in manufacturing companies listed on the Indonesia Stock Exchange. Data analysis was conducted through three main stages: classical assumption testing, descriptive statistics, and application of multiple linear regression. This data testing utilized the STATA 14.0 statistical tool to evaluate the influence of CEO characteristics on carbon emissions disclosure. This study's results show that female CEOs, older CEO age, and higher CEO education levels significantly increase corporate carbon emissions disclosure. Female CEOs tend to be more concerned about environmental welfare, while older and highly educated CEOs are more understanding and committed to transparency and corporate social responsibility. This study provides practical implications for companies considering executive characteristics to improve their social performance. In addition, the results also emphasize the importance of gender diversity and investment in education to improve carbon emissions disclosure practices.

CEO age and corporate environmental policies

This study examines the link between CEO age and firm environmental performance. Building on the upper echelons theory, we predict that a firm is more environmentally friendly if CEOs are younger. Using hand-collected data of a total 12,512 plant-year observations for 1,074 individual firms in the period from 2010 to 2022, we document evidence that younger CEOs release significantly less greenhouse gas emissions, consistent with our conjecture. Additionally, we note that younger CEOs outperform older CEOs in terms of greenhouse gas emissions by investing more in abatement initiatives, increasing manufacturing efficiency, and increasing their use of ecologically friendly fuel. Our evidence of CEO age offers relevant implications for directors, shareholders, and financial regulators.

CEO Age and Capital Structure Dynamics: The Moderating Effect of Overconfidence and Tenure

ABSTRACTThe Upper Echelons theory suggests that managerial characteristics will likely influence their financial decisions. Consistent with this theory, we examine CEO age's impact on Chinese firms' capital structure dynamics. We also investigate the moderating effects of overconfidence and tenure on the relationship between CEO age and capital structure. Using 18,235 firm‐year observations from Chinese listed firms, we document a positive relationship between CEO age and leverage. The results show that the CEOs' age‐overconfidence and age‐tenure relationship have an inverse relationship with leverage. Particularly, we find that CEO overconfidence and tenure impact market leverage more than book leverage. Our sensitivity analysis indicates that young CEOs use less debt, consistent with the market‐leaning hypothesis. We also find a positive relationship between CEO age and leverage in state‐owned enterprises. Our results are robust for decomposition analysis, selection bias test and endogeneity.

Corporate Governance and Pay-For-Performance: The Impact on Earnings Management in Nepalese Commercial Banks

This study examines the impact of corporate governance and pay for performance on earnings management in Nepalese commercial banks. Efficiency ratio and basic earning power are selected as the dependent variables. The selected independent variables are board size, tenure of CEO, age of CEO, size of firm, board meetings, compensation, independent directors and foreign ownership. The study is based on secondary data of 17 commercial banks with 102 observations for the study period from 2017/18 to 2022/23. The data were collected from Banking and Financial statistics published by Nepal Rastra bank and the annual reports of the selected commercial banks. The correlation coefficients and regression models are estimated to test the significance and importance of corporate governance and pay for performance on earnings management in Nepalese commercial banks. The study showed that board size has a negative impact on efficiency ratio and basic earning power. It indicates that increase in board size leads to decrease in efficiency ratio and basic earning power. Similarly, tenure of CEO has a negative impact on efficiency ratio and basic earning power. It indicates that increase in tenure of CEO leads to decrease in efficiency ratio and basic earning power. Likewise, age of CEO has a positive impact on efficiency ratio and basic earning power. It indicates that higher age of the CEO in the organization leads to increase in efficiency ratio and basic earning power. Further, size of firm has a positive impact on efficiency ratio and basic earning power. It indicates that larger the size of firm, higher would be the efficiency ratio and basic earning power. In addition, board meetings has a positive impact on efficiency ratio and basic earning power. It indicates that higher the number of board meetings, higher would be the efficiency ratio and basic earning power. Moreover, compensation has a positive impact on efficiency ratio and basic earning power. It indicates that better the compensation facilities, higher would be the efficiency ratio and basic earning power. Likewise, independent directors has a positive impact on efficiency ratio and basic earning power. It indicates that increase in independent directors in the board leads to increase in efficiency ratio and basic earning power. Further, foreign ownership has a positive impact on efficiency ratio and basic earning power. It indicates that higher the proportion of foreign ownership, higher would be efficiency ratio and basic earning power.

Does board–CEO age similarity affect earnings management? An empirical analysis from M&A contexts

Does board–CEO age similarity affect earnings management? An empirical analysis from M&A contexts

Exploring the nexus between CEO characteristics and the value of excess cash holdings through the lens of the resource-based view theory

Purpose This study aims to examine the relationship between CEO characteristics and the value of excess cash holdings from the perspective of resource-based view (RBV) theory in the context of Malaysia. Design/methodology/approach The analyses were made using ordinary least squares across 173 non-financial firms listed in Bursa Malaysia over the period of 2015–2021. The authors address potential endogeneity through the generalized method of moments. The results are also robust to alternative measures of excess cash holdings. Findings The results showed that female CEOs and CEOs’ educational level are significantly positively related to the value of excess cash holdings. In contrast, CEO tenure and CEO age negatively affect a firm’s excess cash valuation. The results are robust to measurement error and endogeneity issues. Practical implications The empirical results have useful policy implications. For practitioners, firms are recommended to prioritize the selection of female CEOs and CEOs with high education levels within their top management, as this initiative can result in improved value associated with excess cash holdings. In addition, policymakers are recommended to guide programs that attempt to improve educational attainment and gender diversity in business leadership. This study also provides investors with insightful information about the possible relationship between CEO traits and company performance, especially with regard to measures for managing surplus capital. Originality/value To the best of the authors’ knowledge, this study is the first to explore the role of CEO characteristics in the value of excess cash holdings based on the RBV theory.

Corporate Governance and Ceo Characteristics on Financial Reporting Quality: Evidence from Consumer Goods Companies in Asean

Objective: The purpose of this study is to obtain empirical evidence regarding the effect of corporate governance (board size, board independence, audit committee size, audit committee independence) and CEO characteristics (CEO age, CEO duality, and CEO gender) on financial reporting quality. Method: This study conducted content analysis and linear regression analysis on 258 consumer goods sector companies listed on the Osiris and Bloomberg databases for the period 2018-2021. Results and Discussion: The results obtained revealed that board size and CEO gender have a positive effect on financial reporting quality. In contrast, board independence and CEO duality have a negative effect on financial reporting quality. Meanwhile, audit committee size, audit committee independence, and CEO age have no effect on financial reporting quality. Research Implications: The research on financial reporting quality explains useful implications for companies to make economic decisions and avoid fraud that happens to a company. Originality/Value: Authors find that no studies have investigated the effect of corporate governance and CEO characteristics in the ASEAN context. This study provides empirical data about the effect of corporate governance and CEO characteristics on financial reporting quality and how these different compositions and characteristics can facilitate the transition to manipulate and affect the financial reporting quality.

CEO age and firm innovation: evidence from IT industry in Korea

CEO age and firm innovation: evidence from IT industry in Korea

Connected to risk: CEOs’ hometown connections and firm-level political risk in China

ABSTRACT This paper investigates the nexus between CEOs’ hometown connections and firm-level political risk by employing a sample of Chinese listed firms from 2011 to 2020. Our findings show that CEOs’ hometown connections mitigate firm-level political risk. The above finding remains valid after ruling out the explanation of the firm’s local embeddedness and conducting IV regression estimation. Then, we further discuss the potential interaction effect of CEO age and CEO duality. Therefore, we deepen the understanding of the advantage of CEOs’ hometown connections and show a plausible mitigating factor of the political risk faced by firms.

Do young CEOs matter for corporate digital transformation?

This paper investigates the empirical relation between CEO age and corporate digital transformation. Using a sample of Chinese listed firms between 2007 and 2022, we find that younger CEOs exhibit a higher propensity to engage in digital transformation when compared to older counterparts. We pinpoint two key driving factors behind this phenomenon: CEOs’ motivation to establish a good reputation and their willingness to embrace failure. Furthermore, our heterogeneity tests show that the negative relation between CEO age and digital transformation does not vary with firms’ state ownership, but is more pronounced among firms with fewer financial constraints. Overall, our finding contributes to the growing body of literature examining the role of managerial traits in corporate digital transformation.

Older and wiser? The impact of CEO age on firm’s tax amnesty participation

Older and wiser? The impact of CEO age on firm’s tax amnesty participation

CEO characteristics and bank stability: Evidence from an emerging economy

AbstractThis paper investigates the effect of CEO characteristics on bank stability of commercial banks in Vietnam. The study used regression models Pooled OLS, Fixed effects Model (FEM), random effects model (REM), and Feasible Generalized Least Square (FGLS) to evaluate the relationship between CEO characteristics and bank stability of 26 commercial banks in Vietnam. To deal with the limitations of traditional regression methods, we propose Bayesian regression method. The data collection period in the study is from 2013 to 2022. In these regression models, CEO power, female CEO, CEO tenure, and CEO age are independent variables. The dependent variable representing bank stability is the Z‐score. The research results show that the factors CEO power, female CEO, CEO tenure, CEO age have a positive impact on bank stability in Vietnam.

The Influence of CEO Characteristics on the Corporate Gov-ernance Index (CGI) with Corporate Secretary Characteristics as a Moderating Variable

This study aims to examine the effect of CEO characteristics on the Corporate Governance Index (CGI) with the characteristics of the corpo-rate secretary as a moderating variable. The sample used is a company listed on the Indonesia Stock Exchange for the 2018-2022 period with a total of 939 observations. We offer novelty in the form of a combination of Shahwan's (2015) and Al-Hadi et al's (2017) CGI measurements to com-plement the shortcomings of both measurements and produce better re-search results and reduce bias. The data analysis used to answer the hy-pothesis is moderating regression analysis. The results showed that the characteristics of CEO age and CEO tenure had a significant effect on CGI. The characteristic of corporate secretary age is proven to moderate the effect of CEO age on CGI. The characteristics of corporate secretary tenure are proven to moderate the influence of CEO tenure on CGI. This research adds to the literature on CEO characteristics, characteristics of corporate secretaries and CGI, and provides important information that corporate secretaries need to pay attention to.

Determinan Faktor-Faktor Capability sebagai Perspektif Fraud Diamond terhadap Kecurangan Laporan Keuangan

Financial statement fraud is defined as deliberately not following the accepted accounting principles when reporting financial information, which leads to significant omissions or distortions of the facts. The purpose of this study is to determine the effect of capability in detecting fraudulent financial statements. Fraudulent financial statements can occur when a company intentionally violates accounting principles or ignores applicable financial reporting standards. Fraud diamond is one of fraud risk factor, one of which is capability. Many frauds, especially some of the multibillion-dollar ones, would not have occurred without the right person with the right capabilities in place. In this study, capabilities as measured by CEO prestige power, CEO education, CEO experience, CEO horizon, CEO founder, CEO expert power, CEO age similarity, and CEO number executive. The type of data used in this study is secondary data in manufacturing companies listed on the Indonesia Stock Exchange in 2017-2021. Sampling method by purposive sampling, obtained as many as 114 companies as samples. The data analysis method used logistics regression. The results of this study show that CEO age similarity and CEO number executive has a positive impact on fraudulent financial statements, meanwhile the other variables have no impact of fraudulent financial statements. 

STRUKTUR KEPEMILIKAN, USIA CEO DAN PRAKTIK MANAJEMEN LABA: STUDI PADA CONSUMER GOODS INDUSTRY

The purpose of this research is to find the influence of family ownership, institutional ownership, and the age of CEO towards earnings management. The sample in this research are 30 manufacture companies from consumer goods industry. The sampling technique in this research using purposive sampling. By using panel data analysis we find that family ownership is not have any influence on earnings management. While the age of CEO and institutional ownership have the influence on earnings management.

Karakteristik CEO dan Pengungkapan Informasi ESG Perusahaan Publik Indonesia

This research aims to determine the influence of CEO educational background, CEO tenure and CEO age on ESG information disclosure. This research was conducted on manufacturing sector companies listed on the Indonesia Stock Exchange for the 2018-2021 period. The sample for this research was determined using a purposive sampling method with a sample of 32 observations. The collected data was analyzed using multiple linear regression. The results of the analysis show that the CEO educational background and CEO tenure variables do not have a significant influence on ESG distance, while CEO age has a negative influence on ESG distance. Research can provide information to companies in selecting CEOs with stereotypes by revealing ESG and factors that can influence it, namely the age of the CEO. It can be recommended that companies monitor ESG reporting and disclosure, while still considering the age of a CEO which influences ESG reporting.
 Keywords: Educational Background; Tenure; Age; ESG

CEO age, financial reporting quality, and the role of clawback provisions

Purpose Motivated by rapidly increasing CEO age in the USA, the purpose of this study is to analyze the effect of CEO age on financial reporting quality and consider the moderating role of clawback provisions. Design/methodology/approach This study uses a data set of 18,492 US firm-year observations from 2003 to 2019. Financial reporting quality is proxied with accruals-based and real activities earnings management measures, and with financial statement irregularities, measured by applying Benford’s law to financial statement line items. A number of sensitivity tests are conducted including the use of an instrumental variable. Findings The results provide evidence that financial statement irregularities are more prevalent when CEOs are older, and they suggest a complex relation between CEO age and real activities earnings management. The results also suggest that the effect of CEO age on financial reporting quality is moderated by the presence of clawback provisions which became mandatory for US-listed firms in October 2022. Originality/value This study is the first, to the best of the authors’ knowledge, to consider the effect of CEO age on financial statement irregularities and earnings management. This study has important implications for stakeholders evaluating the determinants of financial reporting quality, for boards of directors considering CEO age limitations and for policymakers considering mandating clawback provisions, which recently occurred in the USA.

Board Profile and Pandemic Covid-19 Effect on Improving Level of Environmental, Social, And Governance (ESG) Disclosures: (Evidence from Energy Companies listed on the Indonesia Stock Exchange in 2018-2020)

Environmental and social issues brought new emerging issues in running the business; profit was no longer the ultimate goal for sustainability, but concern to improving environmental, social, and governance quality is the one way to achieve sustainability. This study examines the effect of the BOD profile on the level of Environmental, Social, and Governance (ESG) disclosure. The CEO’s educational background measured proxies of BOD profiles, the proportion of gender diversity in the Board of Directors, and the CEO’s age. This study uses quantitative methods and multiple regression analysis to test the hypothesis. The sample in this study are companies listed on the Indonesia Stock Exchange in the energy sector, with a total sample of 62 firms years. The results showed that the CEO’s educational background and CEO Age positively affect the level of ESG disclosure. Board gender diversity and the COVID-19 pandemic did not affect the level of ESG disclosure.

Watch me invest: Does CEO narcissism affect green innovation? CEO personality traits and eco‐innovation

AbstractThis study explores an important yet understudied relationship between CEO narcissism and green innovation, both separately and when moderated by CEO demographic traits (international experience and age). We analyzed a sample of 206 U.S.‐listed firms on the S&P 500 over a 10‐year period. Our initial findings indicate a negative association between CEO narcissism and green innovation. However, further analysis reveals that this relationship is influenced by two CEO demographic traits. Specifically, CEOs' international experience and age mitigate the initially negative link between CEO narcissism and green innovation. These results align with insights from the upper echelon theory, shedding light on the dark side of narcissism. The implications of our findings extend to firms' team management, directors, policy‐makers, and regulators.