CEO Values Research Articles

Business model innovations amidst adverse economic conditions: the role of CEO values

Purpose The current business environment is characterized by high levels of uncertainty that affect the global economic system and have the greatest impact on small and medium-sized enterprises (SMEs). With an elevated degree of perceived uncertainty, Chief executive officers' (CEOs) of SMEs find themselves in a situation where the old approaches to decision-making are irrelevant and the time to create new ones is limited. The purpose of this study is to examine whether appealing to personal values helps CEOs cope with a high level of perceived uncertainty and make decisions about the further development of the firm by undertaking business model innovations (BMI). Design/methodology/approach This study follows a multiple case study research design drawing on data collected from 10 Russian SMEs. Findings The authors show that CEOs’ communion values lead to innovations in the revenue model and value architecture dimensions of the business model. CEOs who are inclined to agentic values introduce innovations in the revenue model and value offering dimensions. Those executives who balance between the two types of values tend to also balance between different types of innovations in the elements of the business model. Originality/value The results indicate that personal values of CEOs play an important role in managerial processes and the strategic choice of a BMI type. Moreover, personal temporal focus orientation serves as a translation mechanism in the relationship between CEO values and BMI in SME settings.

Reaching the public with Twitter: The reputation value of CEOs

In this study, we investigate whether CEOs' use of Twitter influences their compensation. The results show that CEOs benefit from being active on social media because this participation helps reduce information asymmetry. Further, the effect of this Twitter usage becomes stronger when firms face competitive markets. We also use earnings announcements to show how CEOs' tweets can lower the deviations in stock prices around these announcements. Overall, a CEO's personal use of social media can help to reduce the information asymmetry between their firm and investors. This strategic tool benefits the CEO when negotiating compensation.

Is One Head Better Than Two? Dual Leadership and Firm Performance During the COVID‐19 Crisis

We provide novel evidence on the value of combined CEO and board chair positions (CEO duality) for firms during the COVID‐19 pandemic in 2020. Based on 4,840 firm‐quarter observations from 1,210 unique firms in the US, we show that CEO duality firms outperformed non‐duality firms by a 0.58% margin in quarterly return on assets in 2020, which is equivalent to an incremental annual net profit of US$164 million. A difference‐in‐difference estimation confirms that the benefit of CEO duality is observed only in the COVID‐19 crisis period. Our main finding is robust to potential endogeneity concerns and alternative performance measures. Additional analyses show that the positive impact of CEO duality stems from the mechanisms of operating cost savings and working capital optimization during the crisis. Our finding underscores the benefit of CEO duality when economic uncertainty is high and a speedy decision is important.

CEO compensation: Facts

In this paper we highlight a few striking features of CEO compensation in the US from 1994 to 2020. For the purpose of measuring both the level and sensitivity of compensation, we define the latter as the year–on–year change in the portion of the executive's wealth tied to the firm. Compared to a narrower definition often adopted in the literature to measure levels, the cross-sectional distribution displays much higher skewness and variation. Each year, a sizable fraction of chief executives lose money. During the second decade of this century, the award of options kept declining, while stock grants became more plentiful. In net, the dollar value of CEOs' position in their respective company did not keep up with the growth in capitalization. This contributes to explaining why the semi-elasticity of compensation with respect shareholder wealth has declined.

Opening up their values: how CEOs conservation and openness to change impact downsizing decisions

PurposeBased on the theory of basic human values, this study aims to examine the impact of CEO conservation (i.e. security, conformity and tradition) and openness to change (i.e. self-direction, stimulation and hedonism) values on one of the most conflictual decisions inside a firm: workforce downsizing.Design/methodology/approachThe hypothesis testing was done in the context of all workforce downsizing decisions made by German companies (and their CEOs) listed on the German Prime-Index between 2005 and 2019. A software-based psycholinguistic assessment of various sources of CEO communications was conducted to tap into their underlying values.FindingsTobit regression analysis confirms that CEO conservation and openness-to-change values impact the severity of workforce downsizing. Namely, the higher the CEO conservation values, the lower the downsizing severity (i.e. employees dismissed in relation to overall workforce). In contrast, the higher the CEO openness to change values, the higher the downsizing severity.Originality/valueAgainst prior research that has centered around political ideology as a proxy to understand the mechanisms through which values impact strategic decisions, the present study employs advanced measurement approaches to assess the general impact of CEO values on critical firm decisions. As such, the study contributes to upper echelons research by offering a new perspective on how CEO values impact critical firms' decisions.

The politician as a CEO, corporate governance and firm value

Using a data set of two important emerging markets namely Taiwan and Pakistan, we investigate an unexplored dynamic of the top leadership i.e. the politician as a CEO and determine their impact on firm value. We show that the presence of the powerful politician as a CEO tends to limit the board power and endorse managerial entrenchment i.e. put their self-interests ahead of the firm's goals, which in turn, damage the firms’ value. We find a significant negative moderating effect of the political CEOs on the relationship of concentrated ownership, board independence and firm value.

Striving for sustainable development at the top: Exploring the interplay of director and CEO values on environmental sustainability focus

AbstractDrawing from research on strategic management and environmental psychology, this study investigates the role of independent directors' and CEOs' values in promoting sustainable development. We propose that their values may interactively shape directors' focus on environmental sustainability. We test our propositions with survey data from 176 directors and matching CEOs. Our results confirm that there is a significant positive relationship between directors' biospheric values and their environmental sustainability focus, which is further amplified by CEO egoistic values. In contrast to our expectations—and regardless of CEO values—directors' egoistic values appear to be unrelated to their environmental sustainability focus. As such, this research points to the importance of director and CEO values acting as substitutes rather than complements in shaping directors' environmental sustainability focus. Taken together, this study highlights the importance of considering both director and CEO values in promoting environmental policy at the top of the organization.

Enhancing young consumer’s relational and behavioral outcomes: The impact of CEO activism authenticity and value alignment

This study surveyed 373 U.S. consumers on how perceived CEO activism authenticity and consumer value alignment (e.g., a match between personal values and a CEO’s stance on a sociopolitical issue) influence young consumers’ identification with the CEO’s organization, foster quality consumer relationships with the CEO’s organization, and increase purchase intention. The results of structural equation modeling analysis showed that the perceived authenticity of CEO activism positively influenced young consumers’ relationships with the organization and their intent to purchase. Value alignment also demonstrated a strong positive effect on consumer organizational identification. Furthermore, high-value alignment and organizational identification both contributed to the quality of consumer relationships with the organization. Consumers’ identification and relationships with the organization were revealed as serial mediators in the relationship between perceived value alignment with CEO activism and consumers’ purchase intention.

CEO values as antecedents to corporate political activity: An empirical exploration

In this article, we seek to contribute to the literature on corporate political activity (CPA) by exploring the impact of CEO values on this nonmarket activity. Building a database of CEO values by analyzing the text of quarterly earnings conference call transcripts, we test whether firms with CEOs who value achievement, universalism, or stimulation tend to invest in CPA. We argue that these three values indicate whether a CEO values advancing the interests of the firm (achievement), playing a responsible role in society (universalism), or personal satisfaction (stimulation). We find that of the three, only stimulation is positively associated with CPA, suggesting that CEOs are using CPA to satisfy themselves personally rather than achieving higher firm performance or advancing society’s interests, supporting the arguments of those who raise concerns over firm expenditures on CPA.

CEO's characteristics and value creation from corporate spin‐offs

AbstractAn important corporate spin‐off procedure is forming the spun‐off unit's management team by a parent firm, especially the selection of the spun‐off unit CEO. Using 207 completed spin‐offs with announcement and execution dates between 1994 and 2018, we investigate whether the financial expertise of spun‐off unit CEOs is an essential determinant of post‐spin‐off performance other than spun‐off unit CEOs’ other observable characteristics, including their general managerial skills. We find that the abnormal announcement returns for appointing financial expert CEOs at spun‐off units are between 2.83 and 3.14 percentage points larger than those generated for appointing non‐financial expert CEOs. Furthermore, spun‐off unit CEOs with financial expertise significantly improve spin‐off firms’ access to external capital resources and subsequent operating performance. Overall, we conclude that spun‐off unit CEOs’ financial expertise is a critical determinant of the value creation of spin‐off procedures. Our paper contributes to a growing literature on CEOs, their characteristics, and their impact on firm performance.

The role of leverage as mediator the effect of male CEO masculinity face on research & development

This study aims to prove the support of Agency Theory and Behavioral Consistency Theory as a solution to explain the role of leverage in mediating the influence of male CEO masculinity on research and development. This study uses a quantitative approach with a population and research sample using companies on the Indonesia Stock Exchange in 2017–2021. This study collects facial images identified as male CEOs from data on the Indonesia Stock Exchange website and company websites and utilizes Google search. The data analysis method in this study uses Structural Equation Modeling which connects theories, concepts and data that can be applied to research variables. The findings explain that decreasing and increasing leverage has an impact on increasing and decreasing the masculinity value of male CEOs as well as increasing and decreasing the value of research and development. The implications of the results of this research can assist the Indonesian Institute of Accountants in developing Financial Accounting Standards No. 19 in Indonesia. The theoretical implications of the results of this study can be explained through Agency Theory, Behavioral Consistency Theory and Upper Echelon Theory. The policy implications of the results of this study can provide empirical evidence that the higher the face value of masculinity for male CEOs has an impact on increasing leverage and research and development costs, conversely the lower face value of masculinity for male CEOs has an impact on increasing the value of leverage as well as research and development, and leverage mediates the effect of face male CEO masculinity on research and development costs.

Organizational Learning Process, CEO Values and Sustainability Performance of Manufacturing Firms in Uganda

Purpose- The paper aims to examine the moderating effect of CEO personal values on the relationship between the organizational learning process and sustainability performance.Design/Methodology-An explanatory cross-sectional design was used to obtain quantitative data from the managerial staff of 256 medium and large manufacturing firms in Uganda. A survey instrument was used to collect data.Findings-Organizational learning process and the CEO's personal values have a significant positive direct effect on sustainability performance. Further, the CEO's personal values significantly moderate the relationship between the organizational learning process and sustainability performance.Practical Implications- Strategies such as training, teamwork, consultancy engagements, and research facilitate learning processes of knowledge acquisition, sharing, interpretation, and storage which in turn improve sustainability performance. In addition, firms that hire CEOs whose personal value system is inclined towards change and self-transcendence are more likely to foster a culture of continuous organizational learning which improves sustainability performance

The Politician as a CEO, Corporate Governance and Firm Value

The Politician as a CEO, Corporate Governance and Firm Value

CEO Experience and Value Creation: Evidence from Green Lab Locations

CEO Experience and Value Creation: Evidence from Green Lab Locations

Implications of the “momentum” theory of digitalization in accounting: Evidence from Ash Cloud

We aim to demystify digitalization in accounting (DIA) based on the case study of Ash Cloud, a digital factory in Shenzhen, China. From the perspective of dynamic capabilities, we develop the “momentum” theory of DIA to illustrate that firm and executive characteristics drive digital transformation and organizational capabilities. Ash Cloud’s CEO values and cultivates an organizational culture of transparency and openness, while the firm is characterized by cost pressures. Organizational capabilities shape digitalization in business processes and different approaches to DIA. Our findings suggest that the core competence of Ash Cloud is its capability for systems integration, which includes knowledge of redesign, reconfiguration and redefinition. Ash Cloud stands out because of its knowledge extending beyond the firm’s boundaries.

The impact of a male CEO’S facial masculinity on leverage

The purpose of this study was to obtain empirical evidence of the effect of male CEO’s facial masculinity on leverage, to identify the effect of male CEO’s facial masculinity on leverage. This study uses a quantitative approach with a population and research sample using companies on the Indonesia Stock Exchange in 2016–2021. The study collected images of faces identified as male CEOs from data from the Indonesia Stock Exchange website and company websites and using Google searches. The panel data analysis method in this study uses Regression Ordinary Least Square (OLS) with Stata Software which connects theories, concepts and data that can be carried out on research variables. The findings suggest that the higher the value of male CEOs’ facial masculinity, the greater the effect on reducing corporate leverage, and vice versa, the lower the value of male CEOs’ facial masculinity, the greater the impact on increasing corporate leverage value. The practical implications of this study can help the Indonesian Association of Accountants in developing accounting in Indonesia. Meanwhile, the theoretical implications of this study can explain agency theory and behavioral consistency theory. As for the policy implications of this study, it could provide empirical evidence that male CEOs’ masculinity undermines corporate leverage. To date, researchers in Indonesia have not identified significant research on the topic of masculinity of male CEOs in relation with leverage, or the characteristic role of male CEOs in influencing leverage policy. This study contrasts previous findings of a study that was conducted in the United States from 1993 to 2008. Meanwhile, the sampling period for this study was from 2016 to 2021 and was conducted in Indonesia.

CEO turnover, political connections, and firm performance: Evidence from China

In our analysis of 5738 CEO turnover events among A-share listed companies in China over the period of 1993 to 2019, we find that CEO turnovers on average hurt companies' market performance with significant negative abnormal returns in the event window. We then group the companies into four types based on whether the outgoing and successor CEOs have political connections, and then calculate the abnormal returns in the event windows of CEO turnovers once announced. We find that companies generally enjoy positive abnormal returns if they replace politically non-connected CEOs with connected ones. Such a positive effect is more evident among non-state-owned enterprises (non-SOEs), companies with worse performance, and companies with higher financial constraints. However, abnormal returns derived from hiring politically connected successor CEOs turn to negative following China's massive anti-corruption campaign in 2012. Our findings provide direct estimations of the economic value of CEOs' political connections for A-share listed companies in China and reveal boundary conditions that moderate the influence of hiring politically connected CEOs.

The Rise of Stakeholder Governance and Diversity, and Consequences on Executive and Board Careers

The role of corporate leaders has changed vastly in the past few decades. In particular, the past decade has been marked by the rise of stakeholder pressures from activist shareholders looking to extract shareholder value, social activists seeking social participation, and increasing consumer and media attention on corporate leaders. As societal issues have gained recognition and stakeholders are increasingly powerful in governance, organizations and their leaders are held to a level of accountability never seen before in new areas including stakeholder governance and diversity. Corporate leaders are more diverse than they have been in the past, expected to be attune to stakeholder pressures, and presumably more capable of promoting a social agenda within their own organizations. The symposium seeks to understand how increasing pressures from stakeholders, as well as ensuing calls for diversity in the business elite have affected organizational decisions concerning the careers of corporate leaders. The studies explore the interplay of these newer societal pressures on organizations and uncover the degree of accountability imposed on their corporate leaders. How symbolic capital reduces negative spillovers for corporate directors Presenter: Seok-Hyun (Stephen) Hwang; Hong Kong Baptist U. Presenter: Edward J. Zajac; Northwestern U. How Decision Makers’ career histories impact the Gender diversity of CEO successor candidate pool Presenter: Andre Havrylyshyn; Darla Moore School of Business, U. of South Carolina Presenter: Donald Joseph Schepker; U. of South Carolina Regulatory violations of stakeholder rights and verbal displays of CEO value: Effects on dismissal Presenter: Daniel Zyung; Southern Methodist U. Presenter: Wei Shi; U. of Miami Class-based performance? How social class background influences performance and CEO career outcomes Presenter: Michelle K. Lee; Smith School of Business, Queen's U. Presenter: Shelby Gai; Michigan State U.

CEO Liberalism, Firm Governance, and Innovative Behavior

We draw on upper-echelons literature recognizing the important role of CEOs in firm strategy, and corporate governance research, to examine the role of CEOs’ political ideologies, in particular their degree of liberalism, on firm innovative behavior. We suggest that firms run by liberal CEOs engage in more exploratory innovation search, and produce more breakthrough innovations, but also more low-quality innovations. Internal and external governance mechanisms such as CEO compensation, board independence, institutional ownership, antitakeover provisions, and competition moderate these relationships. We test our hypotheses on a sample of 411 public firms and use firms’ patenting activities to capture innovative behavior. Our study provides a more nuanced perspective on the role of CEO values and their interplay with governance mechanisms on firm innovative behavior.

Simulation and analysis of lead-free perovskite solar cells incorporating cerium oxide as electron transporting layer.

The great demand for renewable energy has greatly contributed to the development of the solar cell industry. Recently, silicon solar cells have dominated the world market. The ease of processing gives perovskite solar cells (PSCs) an advantage over conventional silicon solar cells. Regular silicon photovoltaics require expensive, multi-step processes accomplished in a specialized ultraclean-chamber facility at an elevated temperature (>1000 °C) and highly vacuumed workspace. Hence, researchers and the solar cell industry have focused on PSC as a great rival to silicon solar cells. Despite this, the highest efficiency was obtained from lead-based PSC, which has a considerably high toxicity issue and low stability related to lead content, so the research field pays attention to lead-free perovskite solar cells. In this digital simulation, tin-based perovskite in this paper, methylammonium tin iodide (MASnI3) with the use of cerium oxide (CeO x ) as an electron transporting layer (ETL) with varying percentages of oxygen, which means different shallow donor densities (ND). The optimum value for the thickness of the absorber layer (perovskite) was made, and the current-voltage characteristics and efficiency calculations were also accomplished for the best cell. Then an improvement was made by changing the ND value of CeO x , and the best-optimized cell parameters were: open circuit voltage (V OC) of 0.92 V, short circuit current density (J SC) of 30.79 mA cm-2, power conversion efficiency (PCE) of 17.77%, and fill factor (FF) of 62.86%.