Chief Executive Officer Positions Research Articles

Do Powerful CEOs Benefit Firm Performance in Pakistan?

Manuscript type: Research paper Research aims: This study examines the impact of Chief Executive Officer (CEO) power dimensions on firm performance. Design/Methodology/Approach: A panel data of 110 Pakistani firms listed on the Pakistan Stock Exchange for the period of 12 years (2008- 2019) was analysed using the GMM approach. Research findings: The GMM regression results revealed significant relationships. The analysis suggests that CEOs with considerable structural, ownership, prestige, and expert power tend to exhibit superior performance, as these factors are positively correlated with firm performance. Conversely, CEO family power appears to have no discernible impact on firm performance. Importantly, the robustness of our findings underscores the consistent nature of these relationships. Theoretical contribution/Originality: This study makes a valuable contribution to the existing literature by demonstrating the positive influence of CEO power on firm performance, which aligns with the theoretical framework of the Approach/Inhibition theory of power. The originality of this research stems from its examination of individual dimensions of CEO power and their impact on firm performance, as well as the inclusion of the additional dimension of family power. Practitioner/Policy implication: The insight from this study suggests that powerful CEO leadership is beneficial for firm performance and the concentration of power at the CEO position should be seen positively rather than the negative perspective provided by agency theory.

THIS IS ME! The Financial Impact of Ad Agency CEOs and CCOs Who Are Women and People of Color in the C-Suite

Abstract: Although there have been many advances for women and people of color in corporate America, their representation in the top management positions, such as chief executive officer (CEO) and chief operating officer (COO), is still scarce. Among the CEO positions in the 2020 S&P 500, there are only four African American chief executives leading the largest 500 companies in the US. The advertising industry parallels corporate America when it comes to race, gender, and diversity in the top echelons of firms. Can these dismal statistics ever change? If given the opportunity, can White women and people of color excel as CEOs in the advertising industry? This study seeks to understand the role of ownership on revenues when diverse c-suite leaders manage multicultural or general market agencies. This work first posits the predictive relationship of private and public (holding company) advertising agency ownership on revenue. Next, the work leverages the theories of economic detour and resource dependence theory to hypothesize that the race or ethnicity of the advertising agency's CEO and agency type (general market or multicultural) are boundary conditions of this relationship. Results demonstrated that publicly-owned advertising agencies predicted increased revenues. This positive relationship was strengthened by multicultural advertising agencies yet inconclusive for advertising agency CEOs of color. CEOs of color perform at relative parity, in terms of revenue, in privately-owned versus publicly-owned advertising agencies. These findings demonstrate a racial and ethnic separation in the advertising industry, where advertising agency CEOs of color are revenue-constrained. Yet, if given the opportunity to excel into the c-suite, CEOs of color and White women can be very successful and make their ad agencies profitable. In closing, the authors discuss policy implications for advertising agency executive hiring practices as well as Diversity, Equity and Inclusion (DEI) efforts and trends.

A pathway to greater meaning in life and well-being for senior executives beset by anti-meaning.

Although work is a significant source of meaning for most people, the role of senior executive generates different meaning and well-being complexities than those experienced or faced by general employees. This study explored how meaning and anti-meaning components affect senior executives' experiences of meaning in life and well-being. The findings enabled devising a pathway to enhance senior executives' net experiences of meaning in life and well-being. A cross-sectional, semi-structured interview study design was used to gather rich qualitative data. Eight participants from southern and eastern Africa, who had held the position of chief executive officer or managing director for at least five years, were interviewed. The findings demonstrated that senior executives' work roles provide a significant source of meaning. However, the roles are accompanied by unavoidable anti-meanings, which are likely to generate additional anti-meanings if not tempered sufficiently, thus reducing the net meaning experienced. From the findings, a practical pathway was devised to assist top executives to deal with the bipolar relationship between meaning and anti-meaning. Consulting and counseling practitioners can utilize the pathway to guide, support, and counsel senior executives towards improved meaning, temper anti-meaning and improve well-being.

The CEO characteristics and Romanian banks performance

The main objective of this research is to identify to what extent the characteristics of the CEO (chief executive officer) influence the financial performance of banks within the Romanian banking system. The sample under investigation includes all 21 Romanian banks, and the analyzed period included the financial years related to the last 5 financial years (2018–2022). Regarding these characteristics, aspects such as age, gender diversity, education, nationality, and duality were included in the research, the financial performance of the banking system being measured through the ROA (return on assets) and ROE (return on equity) indicators, which are often used in the literature, including control variables such as the size of the bank, assessed by the total value of bank assets, the share of debts in total assets and the share of capital in total assets. Regarding the duality of the CEO, this is the practice of the same person holding both the position of chairman of the board of directors and that of executive manager. The authors tried to find the answer to the question: Is there a correlation between CEO characteristics and the financial performance of the banks, and if the answer is yes, to what extent are these correlations significant? To carry out this research, the authors used the SPSS software, the research methodology being predominantly quantitative, including descriptive methods, correlation analyses and regression models. The results of the research indicate that the financial performance of the banks operating within the banking system in Romania (measured by the ROA and ROE indicators) is influenced by the nationality and education of the persons holding the position of CEO but also by the size of the banks, appreciated by the value of their total banking assets.

Specialist CEOs versus Generalist CEOs: CEO Type and Firm Performance Following Initial Public Offerings on the Chinese Market

This study focuses on the effect of Chief Executive Officer (CEO)-level characteristics on a firm’s survival following initial public offerings (IPOs). Specifically, it looks at the impact of generalist CEOs between July 2009 and July 2021 on the likelihood of firm failure and IPO survival. This study uses principal component analysis to create a generalist skills index based on CEO work experience, including the number of roles that the CEO has held, the number of firms in which the CEO has worked, the number of industries in which the CEO has worked, whether the CEO has taken a CEO position in other firms, whether the CEO has worked in a conglomerate, and whether the CEO holds a professional title. The results of the Cox proportional hazards model reveal that companies with a generalist CEO have a higher probability of failing than companies with a specialist CEO, which suggests that generalist CEOs pursue higher salaries and higher reputations through switching between different industries and firms. Performance-related compensation and CEO turnover in companies with generalist CEOs explain the higher probability of firm failure. The main results still hold after controlling for CEO power, board and firm characteristics, and testing using the logit model. This research on the connection between generalist CEOs and a firm’s failure risk also offers insight into a company's CEO hiring choice and job market activities.

Executives’ Prior Employment Ties to Interlocking Directors and Interfirm Mobility

This paper explores how executives’ prior employment ties to interlocking directors, or those who hold additional board seats or executive positions at outside firms, influence individual executive interfirm mobility. As organizational boundary spanners, interlocking directors may be able to influence executive outcomes both within and outside of executives’ current firms. But given natural constraints on internal promotion for executives, we suggest most executives will tend to leverage ties to interlocking directors to access external opportunities, as manifested by movement to outside firms. Analysis of interfirm mobility among a sample of Standard & Poor’s 1500 executives between 2000 and 2014 offer support for this idea. We find a positive association between individual executives’ prior employment ties to interlocking directors and their hazard of movement to outside firms, including to the other firms where these directors serve. At the same time, we argue and find that the strength of this latter relationship will further depend on directors’ competing motivations owing to their specific positions in the focal and interlocking firms. Whereas holding a lead position on the focal firm’s board (i.e., as chairperson or lead independent director) weakens this relationship, holding the position of chief executive officer in the interlocking firm strengthens it. Our theory and findings highlight the unique and important role of interlocking directors in executive interfirm mobility and, in doing so, contribute novel insights regarding how ties to boundary spanners can influence individual outcomes for those to whom they are linked.Supplemental Material: The e-companion is available at https://doi.org/10.1287/orsc.2022.1638 .

Chief Executive Officers and the Value of US Airlines: The Moderating Effect of Carrier Type

The purpose of this research is to explore the moderating effect of carrier type on the effects of upper echelon attributes. The study subject is the position of chief executive officer (CEO). The dependent variable is market-to-book value; the independent variables are CEO age, tenure, and educational background. The moderator is LCC. For the data collection, this study used COMPUSTAT and EXECUCOMP using the standard industry classification code 4512; the data are collected from Annual 10K and Linkedin. There are 15 airlines examined, and the study period is from 1999–2019; in total, 210 observations were used for the data analysis. Multiple regression analysis was the main instrument used to test the research hypotheses. The results indicate that both older CEOs in LCCs performed better in the market.

Women leaders and corporate social performance: do critical mass, CEO managerial ability and corporate governance matter?

PurposeThis study aims to investigate the impact of top management team (TMT)'s gender diversity on corporate social performance (CSP). It sheds light on inconsistent results in literature by testing the moderator effects of chief executive officer (CEO) managerial ability and corporate governance (CG) on such impact.Design/methodology/approachA dynamic panel estimator is applied to an international sample of 8640 firm‐year observations from 2013 to 2017.FindingsThe author finds reliable evidence that the critical mass of at least three women leaders has a positive impact on the firm's CSP. Obtained results suggest, moreover, the deterrence effects of CEO managerial ability and CG tools (board independence, board gender diversity, the presence of a corporate social responsibility committee and family control) on the women leaders' contribution to the firm's CSP level. These results remain consistent with alternative measures for women leaders and CEO managerial ability. However, findings are lost when women achieve the CEO position, the chairperson position or both positions, which imply that men and women leadership styles are closely similar rather than different. Furthermore, women leaders' effect on CSP seems dependent (do not) on the country (industry) which a firm belongs to.Practical implicationsFrom a practical standpoint, the study highlights the importance of fostering the achievement of a critical mass of women leaders and the combination of CEO managerial ability – educational/professional backgrounds – and CG attributes to improve the firm's CSP. The study has important implications for investors and regulators. If investors wish to increase CSP, they should ask for more gender diversified TMTs. Furthermore, this study supports regulators in their efforts to increase senior women's quotas by providing empirical evidence of better social outcomes under leader gender diversity. The study’s evidence is also useful for companies in setting the criteria to identify CEOs who can support their strategic decisions.Originality/valueBy studying the impact female leaders have on CSP under CEO managerial ability and CG as moderators, this study is the first to display complementarities and substitutions between CEO's managerial ability and selected CG attributes in the promotion of CSP by female senior executives. Furthermore, it fills the void on how TMT's gender diversity impact CSP. In fact, while it is conventionally considered that women are more likely to engage in socially responsible activities, sensitive findings of this study shed light on the brighter side of female executives when they achieve the CEO, the chairperson position or both positions.

Female directors on corporate boards and their impact on corporate social responsibility (CSR): evidence from China

PurposeThis study aims to examine the determinants of the female representations on Chinese listed firm’s boards. This study also investigates the effect of gender diversity on corporate social responsibility activities.Design/methodology/approachThe Tobit regression model is used because the data is censored and using ordinary least square regression can give spurious results. For robust check, the authors also used Heckman’s (1979) two-stage self-selection model to remove the sample self-selection bias.FindingsThe authors find that the female representations on the corporate board are positively associated with firm age, firm performance, corporate governance, family ownership, institutional ownership and managerial ownership while negatively related to firm size and state ownership. This study also incorporates predictors of the critical mass of women on the Chinese listed firm’s board. The study also tests the female-led hypothesis and concludes that the female representation increases in firms with female chief executive officer (CEO) or female chairpersons. The Chinese listed firms with gender-diverse board are socially responsible.Research limitations/implicationsThe importance of diversity in corporate boards has been demonstrated in light of the agency theory and the resource dependence framework. The results contribute to the previous literature by documenting the determinants of female representations on board, robust by alternative measures of gender diversity, firm size, corporate governance and estimation techniques.Practical implicationsThe economic significance of gender diversity stirred the firms to increase female representation. The policymakers can understand the reasons for female underrepresentation in Chinese boards and can reform the regulation to enhance governance quality, non-state ownership and risk aversion among the listed firms.Originality/valueThis study contributes to the literature by providing empirical evidence on the key predictor of the world’s largest emerging economy, specifically the study focuses on the firm specific determinants, different governance attributes, ownership structure and firm risk measures. This study also seeks to answer if the presence of a female in the Chairperson or CEO position encourages the firms to hire more female directors or not?

CEO succession origin, audit report lag, and audit fees: Evidence from Iran

This study examines whether chief executive officer (CEO) succession origin (hiring an insider CEO versus an outsider CEO) is associated with audit report lag (ARL) and audit fees in the Iranian setting, which is characterized by less-developed corporate governance mechanisms and a constrained audit market. Using a sample of firms listed on the Tehran Stock Exchange between 2007 and 2017 and three proxies for ARL, I find that audit report delay is longer if the CEO is promoted from within the firm. Furthermore, audit fees are higher for firms promoting an insider to the CEO position than for firms hiring outsider CEOs. Further analyses show that the positive effects of insider CEOs on ARL and audit fees are more pronounced when firms are audited by private audit firms. The results remain robust after controlling for firm-level fixed effects, addressing endogeneity issue, and running several sensitivity tests. This study contributes to the literature by providing new empirical evidence concerning the effect of CEO succession origin on corporate audit outcomes in an emerging economy setting. The findings of this study suggest that the implications of CEO succession origin for auditors can differ between emerging and developed economies.

Family Ownership and Accrual-Based Earnings Management: Evidence from Tunisia

The aim of this paper is to investigate the effect of family shareholding and chief executive officer (CEO) characteristics on earnings management. We use panel data for a sample of 37 Tunisian non-financial listed firms over the period 2007–2017. We contribute to the literature on corporate governance in family firms by testing the effect of the presence of a family or a founder CEO on earnings management in Tunisia. Our results show that the family ownership and the presence of a family CEO (either founder or not) are positively and significantly associated with earnings management practices. These findings suggest that families’ dominance with a significant equity stake and a CEO position under control leads to an entrenchment effect resulting in poor earnings reporting quality.

Multi-CEOs: Toward a Theory of Executives Leading Multiple Firms

The Chief Executive Officer (CEO) is critical to a firm’s success and the position is commonly considered to be extremely demanding. It is thus surprising that some individuals are “multi-CEOs,” i.e., they simultaneously hold the CEO position in multiple firms. I study four such multi-CEOs using a case-study approach to understand why and how multi-CEOs are appointed and how they conduct themselves while in office. My findings suggest that multi-CEO appointments require special circumstances regarding corporate control or CEOs’ legitimacy. Boards seem reluctant to appoint multi-CEOs and may initially opt to create such arrangements only ad interim. Interestingly, making these ad interim arrangements permanent appears to not be contingent on firm performance, and helped by CEOs’ prior public commitments to their first CEO positions. Further, multi-CEOs publicly bill their appointments as undesirable yet inevitable and not detrimental to firm performance. They avoid conflicts of interest by running firms that are not in competition or by following specific decision rules. Compensation schemes vary but are all highly symbolic. In their daily work, multi-CEOs respond to physical presence requirements through headquarter co-location or travel and exhibit specific patterns in their time allocation. Finally, multi-CEOs utilize Chief Operating Officers (COOs), or tend to face public pressure to do so.

The Impact of Board Composition on Corporate Dividends Pay-Out: "An Empirical Examination of Industrial Companies Listed in Amman Stock Exchange"

This study investigates the impact of board composition on corporate dividends pay-out of a sample of 30 Jordanian industrial companies listed on the Amman Stock Exchange (ASE) during the period (2007-2017). The study examine the impact of a certain variables that represent board composition (Board size , Independent (non-executive ) director , duality of chief executive officer (CEO) and chairman position , Director nationality , Institutional investors ) .Panel-Data analysis was used to test the empirical model in the current study using a fixed affect model and Random effect model. Relevant data were collected from the (ASE) website and from the annual reports of the sampled companies.The result of the study revealed that there is a negative significant effect between Institutional investors, audit firm and dividend per share (DPS) at the 1% level. Moreover, there is a negative significant effect between Independent director and DPS at the 5% level. In contrast, board of director size and firm profitability positively affect the DPS at the 5% level. Furthermore, Duality of CEO and chairman position, director nationality, firm size and financial leverage were found to have no effect on DPS at the 5% level. Keywords: Board Composition, Corporate Governance, Pay-out, ASE DOI : 10.7176/EJBM/11-27-16 Publication date :September 30 th 2019

Robyn Begley, DNP, RN, NEA-BC

Robyn Begley, DNP, RN, NEA-BC

Investigating the CEO of a MAT: Examining practices and positions on ‘the street’

The emergence of Chief Executive Officers as leaders of educational service providers is positioned in multi academy trusts, the preferred structure of schooling in England. Within this structure, the Chief Executive Officer position is distinct and different from previous constructs of headteachers, since the Chief Executive operates at both street level, that is within the MAT, and beyond ‘the street’. In this article, I argue that a new conceptualisation of the headteacher is needed to explain the emerging position and practices of the Chief Executive Officer. These include the interface with the market, adopting entrepreneurial dispositions and constructing professional and business networks. I typologise these practices and positioning through the analysis of empirical data gathered from the Leadership of the Lawrence Trust Project and its Chief Executive Officer, KT Edwards.

Chief Operating Officers and Real Earnings Management

Because Chief Operating Officers (COOs) are responsible for internal operations and because the use of real earnings management (REM) can have negative consequences on longterm operating performance, we posit that COO firms will be less likely to use REM to inflate near-term earnings. Consistent with this, we find that the level of REM is lower for firms with COOs in their list of named executive officers than for other firms. In subsequent tests, we investigate whether the use of REM varies based on whether COOs are dedicated operations officers or are likely to ascend to the Chief Executive Officer position. Using several approaches to classifying COOs as dedicated versus non-dedicated, we find that relative to firms with nondedicated COOs and firms without COOs, firms with dedicated COOs engage in less REM. Overall, our results suggest that the presence of a COO restricts the use of REM on average, and that this effect is driven by those COOs who are dedicated operations officers.

Las mujeres en posiciones de liderazgo y la sustentabilidad empresarial: evidencia en empresas cotizadas de Colombia y Chile

Considerando la teoría de los stakeholders, se analiza la influencia de la variable género en el consejo de administración y la posición de director general, sobre las prácticas de sustentabilidad y responsabilidad social empresarial (RSE) adoptadas en las empresas cotizadas de Colombia y Chile. Para esto se propone un índice de sustentabilidad basado en las recomendaciones del Global Reporting Initiative que integra las dimensiones ambiental, social y económica. A través de un panel de datos compuesto por 491 observaciones durante el periodo 2011-2016, los resultados muestran que la presencia femenina favorece la dimensión económica (rentabilidad y liquidez), mientras que las dimensiones ambiental y social se ven disminuidas. Es necesario promover una mayor participación de mujeres en posiciones estratégicas para incrementar su representación en el contexto latinoamericano.

Women in top positions on boards of directors: Gender policies disclosed in Italian sustainability reporting

AbstractInspired by the promotion of gender balance on boards of directors of listed companies in Europe, this study seeks to understand whether the presence of women with different responsibilities is associated with gender policies disclosed in corporate social responsibility or sustainability reports. Using the data of listed companies in Italy, we find a positive association between the presence of women in the role of chairperson and the implementation with disclosure of gender policies. Consistent with gender self‐schema, women believe in their values, and pay attention to conflict management when they are in the position of chairperson. We find different results when the women are in the position of chief executive officer (CEO). The position of CEO is usually a male job and our results show a non‐significant perception of female problems when a woman occupies the CEO position. This study contributes to corporate social responsibility analysis of the reporting of gender policies.

The effects of corporate governance on the stock return volatility

PurposeThe purpose of this study is to investigate the relationship between the stock return volatility, the outside and the independent directors.Design/methodology/approachThe volatility, as the dependent variable in the model, is measured by the standard deviation of annual stock returns. Concerning the independent variable is as follows: The chief executive officer (CEO) is a dummy variable denoting whether or not the chairman of the board holds the position of CEO. The INDD, which represents the independent directors, is measured according to whether the firm appoints independent directors, or by the ratio of independent directors. The FD, which represents the outside directors, is measured according to whether the firm appoints outside directors, or by the ratio of outside directors. In addition, the authors also add the following five control variables to the regression model: the certified public accountant refers to the auditor-related variables including the audit opinion and whether the firm has previously switched accounting firms. The performance (PER) represents the firm performance in terms of the relative return on assets (ROA). The turnover (TURN) is measured by the natural log of the total liabilities. The SIZE is measured by the natural log of the market value of equity, and the leverage ratio (LEV) is the firm’s debt ratio measured by the ratio of total. The TURN is measured by the natural log of the total liabilities. The SIZE is measured by the natural log of the market value of equity and the LEV is the firm’s debt ratio measured by the ratio of total debt to total assets. The sample comprises 89 firms listed on the SBF 120 index over 2006-2012.FindingsResults reveal that the outside directors have a positive and significant effect on the stock return volatility. Moreover, the firm’s size and ROA have a negative effect on the stock return volatility, which is clearly evidenced in all the regressions. On the other hand, the CEO, audit size and debt ratio have statically significant and positive effects on the stock return volatility.Originality/valueThis study indicates the importance of corporate governance and helps investors and financial economists understand the behavior of the stock prices during a financial crisis. Although the existing studies refer to the influence of corporate governance on the stock prices during a crisis, none of these has ever discussed whether better corporate governance can help reduce the stock price volatility in such a situation.

Performance with purpose: The PepsiCo challenge

Nothing is more challenging for a business leader than trying to change the culture of a company. Indra Nooyi came into the position of chief executive officer (CEO) at PepsiCo with an agenda to significantly change the company, its processes and its culture. To implement her game plan, she expertly managed the PepsiCo corporate brand through strategic communications and articulated a consistent vision to her shareholders, customers and employees. When Nooyi presented a bold agenda to a well-entrenched culture, any weakness in fortitude or financial performance would have quickly spelled doom. Now, with more than a decade of communicating her mantra of ‘Performance with Purpose’, we have the luxury of examining her performance and her communications effectiveness. Leveraging the corporate brand to build a strategic platform for growth is one of the most underutilised tools available to the CEO. Nooyi is an expert at keeping the message clear, concise and consistent over time. This paper presents Indra Nooyi in her own words.