Role Of Chief Executive Officer Research Articles

CEO MACHIAVELLIANISM AND STARTUP PERFORMANCE: UPPER ECHELONS THEORY’S PERSPECTIVE

Startups are important for economic growth and prosperity. Since they are led by their chief executive officers (CEOs) and particularly the tech-startups deal in a dynamic environment which asks for strategic flexibility and consideration of environmental changes for superior firm performance. Considering the importance of the issue, the present study attempted to examine the role of CEO’s Machiavellian personality trait in determining firm performance. Additionally, the mediating role of strategic flexibility between the association of CEO Machiavellianism and firm performance was also tested. Moreover, the moderating role of environmental dynamism was also tested between the relationship of CEO Machiavellianism and strategic flexibility. Data were collected from CEOs of startups and subjected to PLS-SEM for data analysis. The results of the study revealed that CEO Machiavellianism is not significantly associated with firm performance, however, the relationship between Machiavellianism and firm performance was significantly mediated by strategic flexibility. Additionally, results also revealed that environmental dynamism is a significant moderator between the relationship of Machiavellianism and strategic flexibility.

Renewing General Managers' Tasks in an Artificial Intelligence World

Artificial Intelligence (AI) is making important inroads into corporate decision-making. This paper reviews the impact of AI tools and applications on the jobs and tasks of chief executive officers (CEOs) and general managers. It presents the role of the CEO in two large companies that use AI in their business transformation process. With these cases as a background, it discusses the functions and responsibilities that CEOs will have as AI tools are increasingly used. In particular, it elaborates on the key role of CEOs in defining the firm’s purpose, designing its governance, setting the firm’s strategy and reinforcing its uniqueness, engaging people, thinking about the firm’s broader social impact and leading with ethical values to generate trust.

The Effects of Family Firm CEO Traditionality on Successor Choice: The Moderating Role of Socioemotional Wealth

Drawing on upper echelons theory, this study examines how the traditionality of family chief executive officers (CEOs) influences the selection of their successors, and how this relationship is moderated by two dimensions of socioemotional wealth. Recognizing the central role of CEOs in determining successors, we show that a family CEO’s cultural values regarding traditionality have a significant positive effect on the probability that a family member is chosen as successor. We find that this relationship is strengthened by the family members’ identification with the firm and weakened by the family members’ sense of dynasty. Our contributions to theory and practice are discussed.

Divestiture strategy, CEO power and firm performance

PurposeThis study aims to examine the moderating role of chief executive officer (CEO) power on the relationship between divestiture strategy and firm performance by framing the relationship under the agency and power circulation theories.Design/methodology/approachThis study focuses on a sample of 319 non-financial public-listed companies in Malaysia from the year 2012–2016 and estimates the model under two-step generalized method of moments panel regression to eliminate the endogeneity issue.FindingsThe results show that divestiture strategy decreased the firm performance. Meanwhile, greater CEO power changed that divestiture effect but still failed to increase the performance. This study also indicates the CEO power strengthens the relationship between firm performance and divestiture.Research limitations/implicationsThe overall findings show that the positive moderating role of CEO power on the relationship between divestiture and performance. This research confirmed the agency and power circulation theories by showing that CEO power can make divestiture strategy works. However, the moderating plot tells different. CEO power may strengthen the relationship between divestiture and performance; it fails to boost up the performance in overall. Therefore, this study is about CEO power on the strategic decision and gives a good implication for corporate governance concerning the impact of CEO power on the organization’s alignment process.Originality/valueThis study examines the effect of CEO power on the performance of divestiture strategy implementation by contesting the agency and power circulation theories within an emerging country context.

CEO education and the ability to raise capital

AbstractResearch Question/IssueUsing a unique hand‐collected dataset, this study examines the role of chief executive officer (CEO) educational attainments in relation to newly public firms.Theoretical/Academic ImplicationsUsing human capital, institutional and upper echelon theories, we hypothesize and demonstrate that CEO educational attainments do not unambiguously affect investors' perceptions of a firm's future prospects. Instead, their influence depends on the quality of CEO education as well as on the degree of uncertainty regarding the firm's future performance and the level of information asymmetry between issuers and prospective investors. To our knowledge, this is the first study that provides a comprehensive treatment of the role of CEO education in the IPO context.Research Findings/InsightsWe find that initial public offering (IPO) firms led by CEOs with superior educational credentials—in terms of level and quality—are associated with lower levels of IPO underpricing. This association is mainly driven by CEOs that hold advanced degrees. Notably, a difference‐in‐differences approach based on two quasi‐natural experiments indicates that the impact of CEO education on IPO underpricing is more pronounced within environments characterized by lower information transparency. The baseline results also hold in the longer term, thereby confirming the value of signaling prestigious academic awards at the time of the IPO.Practitioner/Policy ImplicationsOur evidence on the importance of CEO education, and especially that CEOs with varying levels and quality of educational training might differentially affect newly listed firms, is useful to providers of financial capital and boards of directors interested in assessing the viability of new ventures. The implication of our study for IPO investors is that it is worth paying more to take an equity position in firms run by better educated CEOs.

Environmental commitment and firm financial performance: a moderated mediation study of environmental collaboration with suppliers and CEO gender

PurposePrior studies have found a mixed result on the relationship between environmental commitment and firm performance. To shed a new light on this relationship, this study aims to draw on stakeholder theory, upper echelon theory and gender socialization theory to determine the mediating role of environmental collaboration with suppliers and the moderating role of chief executive officers (CEOs) gender into this relationship.Design/methodology/approachThis study conducts a questionnaire survey to collect sample data of 177 CEOs in manufacturing firms in China. Structural equation modeling is used to analyze data and test hypotheses.FindingsEmpirical results show that environmental commitment has a positive influence on firm financial performance. Furthermore, the results show that environmental collaboration with suppliers mediates the link between environmental commitment and financial performance. In addition, CEO gender has a moderating effect on the relationship between environmental commitment and environmental collaboration with suppliers. Finally, CEO gender also moderates the indirect effect of environmental commitment on financial performance through environmental collaboration with suppliers.Originality/valueFindings of this study helps to clarify the mediating and moderating mechanism in the relationship between environmental commitment and firm performance. That is this study helps to clarify the mixed relationship between environmental commitment and firm performance in prior literature. This study also provides new insight and knowledge for business managers to make better decision in dealing with the environmental issue to enhance firm performance.

CEO Duality and Financial Performance: Testing the Moderating Role of Firm Age: Evidence from a Developing Economy

This paper tests the moderating role of firm age on the relationship between Chief Executive Officer (CEO) duality and financial performance among manufacturing firms in Uganda. A cross section survey was adopted using 78 manufacturing firms in Uganda. Data was analyzed using descriptive statistics, correlation and hierarchical regression. Modgraph software was also used to ascertain the validity of the set hypothesis. Results reveal that whether the CEO doubles as chairman of board or not, this does not significantly affect firm Financial Performance. However, as the firms grow older, the role of CEO-Board Chairman duality phenomenon gains significance in determining financial performance. Therefore, as firms grow in age, the CEOs should not be the same as Board chairpersons if firms have to perform well financially. Since only a single research methodological approach was employed in this study, future research can undertake to use a mixed methods approach to provide more detailed insights. Further, a longitudinal approach can also be employed to study financial performance trends among manufacturing firms over years. Entrepreneurs of these firms should put emphasis on proper segregation of the CEO role and those of the board chairman especially as firms grow in age. A moderating role of firm age on the relationship between CEO duality and financial performance was tested among manufacturing firms; previous studies have tended to test the direct or mediating effects.

Board structure, firm performance and risk: Recent evidence from Greece

This paper examines the relationship between the characteristics of the board and the performance and risk of a firm using data from forty-five Greek listed companies over the period 2015-2018. The analysis considers various alternative performance measures, both accounting-based and stock-based, as well as two measures for risk. The board characteristics considered are the size of the board, the number of female members on the board, the number of non-executive members on the board, and the duality regarding the roles of the chief executive officer (CEO) and the president of the board. As far as the board size is concerned, the results show no significant impact on performance. This finding is in line with past studies on Greek companies. On the contrary, the presence of women on the board seems to be negatively related to performance. The same seems to be the case for the non-executive members, especially when the stock returns are taken into consideration. Finally, when it comes to duality, the results indicate the occupation of the president and CEO roles by the same person exerts a positive impact on firm performance decreasing, at the same time, its risk. This study contributes to the literature in various ways. First, it uses the most recent data from the Greek market. Furthermore, from a political point of view, the study covers a very interesting period, given that during 2015-2018 Greece had for a first time a left-wing government, a factor that could possibly affect the conduction of business in Greece. In addition, the finding that the duality in the roles of CEO and president can lower the risk of a firm is a new finding. Finally, in general, the results confirm the conclusions of the previous studies on Greek companies about the poor impact of the board on firm performance.

The effect of CEO civic engagement on corporate social and environmental performance

PurposeThe purpose of this paper is to explore the relationship between a chief executive officer (CEO)’s personal engagement in broader societal causes (CEO civic engagement) and firm’s social and environmental performance.Design/methodology/approachA theoretical framework was developed based on upper echelons and stakeholder theories to argue that CEOs’ professional background characteristics can be closely related to firm-level social and environmental performance. Hierarchical OLS analysis was conducted using data from 178 large, publicly traded large US firms between 2010 and 2013.FindingsOverall, the findings suggest that firms led by CEOs with active civic engagement are more likely to support various philanthropic efforts. Additionally, the findings suggest that firms led by civic-minded CEOs are more likely to support an active corporate environmental engagement by investing significant resources in various environmental causes. Contrary to the authors’ predictions, the level of CEO civic engagement was not a significant predictor of firm level community engagement activities.Research limitations/implicationsThe findings extend current scholarly work on executive determinants of corporate social performance by highlighting the important role of CEOs’ personal engagement beyond studying CEOs’ demographic characteristics. Specifically, the findings that the CEO-civic engagements lead to higher degrees of corporate philanthropy and environmental performance show that CEOs’ civic engagement can go beyond what is considered symbolic executive actions.Practical implicationsThe findings suggest that firms that seek to foster social and environmental performance in a meaningful way should recruit and retain CEOs that have a personal commitment to and engagement in various social and environmental issues and causes.Originality/valueBy empirically examining the effect of CEO civic engagement on corporate philanthropy, community involvement and environmental performance, this paper seeks to contribute to the scholarly conversation on the effects of CEOs in shaping the firm’s social and environmental engagement and addressing external stakeholder concerns.

Adoption of LGBT‐friendly practices: The effect of institutional pressures and strategic choice

AbstractThis study explores contextual and organisational factors that influence the likelihood of adopting lesbian, gay, bisexual, and transgender (LGBT)‐friendly practices. Drawing on institutional theory, we hypothesise that state laws, state conservativism, and localised LGBT‐friendliness density will have a direct effect on the adoption of LGBT‐friendly practices. Given the observed variation in the adoption of these practices, we also draw on strategic choice and the upper echelons perspective and hypothesise that the effect of institutional mechanisms is moderated by the beliefs and values of powerful organisational agents (chief executive officers and boards of directors). Our sample consists of 201 U.S.‐based Fortune 1000 companies over a period of seven years, and we test our hypotheses using a Cox proportional hazards survival analysis. Our results offer support for the role of state conservativism and localised LGBT‐friendliness density in the likelihood of LGBT‐friendly practices adoption, as well as for the moderating role of chief executive officer and board of directors' political orientation.

Elizabeth Madigan, PhD, RN, FAAN

Elizabeth Madigan began her nursing career with her bachelor of science in nursing (BSN) from Wright State University and has been on a journey of progressive roles, organizations, and forward-thinking endeavors since that time. She received her MS from The Ohio State University, and began her career in formal leadership positions, including a position as Director of Home Care in Columbus, Ohio, and as assistant chief nursing officer in a hospital at the age of 30.

Women at the helm: Chief executive officer gender and patient experience in the hospital industry.

Health care scholars have recognized the important role leaders play in the improvement of health care delivery systems, yet few have explored the kind of leaders who make a difference or the conditions under which certain health care executives thrive. Recent work in the hospital industry suggests that the role of chief executive officer (CEO) gender may be particularly salient in the context of patient experience (Galstian, Hearld, O'Connor, & Borkowski, 2018). In this article, we bring an explicit theoretical and empirical lens to the issue of CEO gender in the context of patient experience. Our framework provides an explanation of both why (differences between men and women in their tendency for relational orientation) and under what circumstances (the degree of complexity in the executive job environment) CEO gender is most influential. We test these relationships using data on patient experience in 391 nonrural U.S. hospitals between 2007 and 2011. Our study relies on both archival (e.g., Hospital Consumer Assessment of Healthcare Providers and Systems survey) and collected (e.g., CEO characteristics) data. Fixed-effects regression models are used to estimate the relationship between CEO gender and the interpersonal care experience. We find evidence that female CEOs improve the interpersonal care experience faster than male CEOs, particularly in the most complex executive job environments, that is, in the most populous urban environments, and in the largest hospital facilities. Our results not only support the notion that executives tend to rely on personal values and preferences but also that women have an apparent propensity for transforming health care organizations in the direction of patient centeredness, particularly in the most demanding circumstances. Hospital boards seeking to improve the patient experience should give careful attention to promoting women to the role of CEO and consider how their own policies may be constraining both the promotion of female executives and the creation of more patient-centered health care organizations.

Robyn Begley, DNP, RN, NEA-BC

Robyn Begley, DNP, RN, NEA-BC

Do not change horses: specialist CEOs enhance innovation

ABSTRACTThis study examines the relation between specialist Chief Executive Officers(CEOs) and their firms’ future performance, particularly regarding innovation. While human capital theory predicts that firms should innovate better when their CEOs possess more human capital, this relationship has been hard to measure empirically. As a result, little is known about the role of individual CEOs on innovation performance. Using a unique dataset on CEO human capital characteristics for S&P 1500 firms between 1993 and 2010, we examine whether specialist CEOs with strong firm-specific human capital have a significant long-term influence on firm innovation. Our findings support the idea that specialist CEOs promote both a higher magnitude of innovation and higher quality innovation for their current firms. The evidence indicates that the specificity of CEO human capital matters in the context of innovation as a long-term firm outcome.

The Impact of CEO Characteristics on the Internationalization of SMEs: Evidence from the UK

AbstractThis study analyses the role of chief executive officers (CEOs) in the internationalization of small‐ and medium‐sized enterprises (SMEs). Specifically, it examines the impact of CEOs' demographic characteristics on the internationalization of SMEs. Based on upper echelons theory, resource‐based view and information processing theory, it is hypothesized that CEO characteristics like age, education, tenure, and political connectedness affect SMEs' international performance. Using the panel data analysis of 283 UK SMEs for the period of 2005 to 2015, this study provides evidence that CEOs' political connections and educational level are positively related to firm internationalization, while age negatively influences firm internationalization. Tenure is found to have a curvilinear relationship with SMEs' internationalization. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.

The effect of characteristics of audit committee and board on corporate profitability in Iran

PurposeThe purpose of this paper is to evaluate the relationship between the characteristics of the audit committee and the board and profitability among the companies listed on the Tehran Stock Exchange (TSE) in Iran.Design/methodology/approachIn this study, the companies listed on the TSE during the period from 2010 to 2015 are investigated. The Linear panel regression method is employed for this purpose. The independent variables of the study are composed of some corporate governance mechanisms including audit committee size, audit committee expertise, board size, board independence, chief executive officer (CEO) duality, and institutional ownership.FindingsIn spite of the fact that there does not exist any significant association between audit committee size and corporate financial performance, the results indicate that there is a positive and significant relationship between audit committee financial expertise and profitability. The authors found that the number of board members cannot affect corporate performance; moreover, duality of CEO role in Iranian companies does not affect company performance. However, the outcomes showed a positive and significant association between the proportion of outside directors on the board (board independence) and profitability at 99 percent confidence level. This implies that the role of non-executive directors in Iran is inconsistent with the stewardship theory. This is due to the fact that independent directors understand the status of business and market better than the board’s executive members. Finally, the results indicated that there is no significant association between institutional owners and Iranian companies’ performance.Practical implicationsThe findings of this study will reveal more than ever the role of corporate governance mechanisms for society and users of financial statements because as tools on the CEO actions, they always have to pay attention to the implementation of corporate principles in the economic entity’ operation.Originality/valueThis is one of the most important studies that simultaneously examine the impacts of characteristics of the audit committee and the board on profitability in an emerging market, and the results of the study may give strength to Iranian as well other developing countries.

Corporate governance mechanisms and accounting conservatism: evidence from Egypt

PurposeThe purpose of this paper is to investigate the effect of corporate governance (CG) mechanisms (board size, board independence, separation of chairman and chief executive officer (CEO) roles and external auditor type) on accounting conservatism in Egypt.Design/methodology/approachArchival data relating to CG and accounting conservatism are collected and analysed using multivariate regression techniques.FindingsThe findings indicate that board independence is positively associated with accounting conservatism. By contrast, board size and auditor type are negatively associated with accounting conservatism, while separating the chairperson and CEO roles has no significant relationship with accounting conservatism.Originality/valueTo the best of the author’s knowledge, this is one of the first empirical attempts at providing evidence on the relationship between CG and accounting conservatism in Egypt.

Impact of CEO’s characteristics on investment decisions of Indian listed firms: Does crisis make any difference?

Using a sample of listed Indian manufacturing companies, this study examines the role of chief executive officer’s (CEO’s) personal characteristics like age, tenure, education, and career experience in the determination of investment decisions of the firm. The dynamic panel data model estimation, more specifically the system generalized method of moments estimation results reveal a negative relation between CEO’s age and corporate investment. CEO’s financial education is positively associated with investment decisions. The investment cash flow sensitivity analysis posits that CEO’s age and financial education reduce the sensitivity of investment with respect to cash flow. The results are robust across different periods, defined on the basis of crises. In times of financial crisis, we document that firm’s liquidity and age, CEO’s career experience and tenure turn out to be significant determinants of corporate investment. This paper provides an out-of-sample evidence of the role of CEO’s personal characteristics on the determination of corporate investment, which is an unexplored issue from an emerging market perspective.

Chief Executive Officer attributes, board structures, gender diversity and firm performance among French CAC 40 listed firms

Reflecting investor expectations, most prior corporate governance research attempt to find the effect duality Role of Chief Executive Officer, board structures and firm financial performance. Specifically, we refer to devote this paper on investigating the relationship between the Duality Role of Chief Executive Officer (CEO), the CEO tenure, board structures and gender diversity with tow measurement of performance in listed companies in CAC 40. We found evidence provide that board characteristics are positively correlated to the firm’ performance. However, our results show a significant association between ROE, ROA and the board of directors’ composition. We find significant negative association between financial information and equity-based management compensation. On the other hand, the presence of independent directors on the board seems to affect, positively, the level of financial performance CAC 40 firms. Likewise, the stewardship theory assumption, the CEO duality is very high and is significantly associated with a higher level of firm performance. Our results suggest a constant negative relation between firm performance and CEO’s tenure. The results show that there is a significant relationship between board gender diversity and firm performance from our samples CAC 40 companies.

A contemporary view of corporate finance theory, empirical evidence and practice

This article uses a survey of Australian corporate treasurers to shed light on the gap between the theory and practice of corporate finance in Australia. Seven areas are examined: capital structure, payout policy, cash holdings, initial public offerings, seasoned equity offering, mergers and acquisitions, and corporate governance. We also exploit the global financial crisis (GFC) to examine the effect of liquidity shocks on a firm’s capital structure choices. We then compare our Australian survey results with results from a comprehensive US survey conducted by Graham and Harvey. Our survey shows that the board of directors plays the most important role in determining capital structure decisions and that corporate treasurers play the most important role in cash holding decisions. This contrasts with the academic literature that has typically focused on the role of chief executive officer (CEO) in both capital structure and cash holding decisions. In addition, our respondents do not view the tax advantage of interest deductibility to be of first order of importance for debt issuance choices, which contrasts with most of the US empirical studies. Finally, we juxtapose the theory–practice perspective, with a review of the most recent 5 years (2011–2015) of corporate finance research published in the leading Asia Pacific Basin finance journals.