Does CEO power moderate the relationship between board leadership and strategy involvement in private firms? Evidence from Kenya

Joel Kiplagat Tuwey (Department of Accounting and Finance, Moi University, Eldoret, Kenya)
Daniel Kipkirong Tarus (Department of Accounting and Finance, Moi University, Eldoret, Kenya)

Corporate Governance

ISSN: 1472-0701

Publication date: 3 October 2016

Abstract

Purpose

The purpose of this paper is to determine how board leadership affects the board strategic involvement in private firms in Kenya and how CEO power moderates this relationship.

Design/methodology/approach

The authors used a Kenyan data set to investigate what makes boards in private firms get involved in strategy. Survey data derived from a sample of 186 CEOs of private firms were used, and the hypotheses were tested using moderated regression analysis.

Findings

The results indicate that board members’ knowledge, board chairman’s leadership efficacy, board members’ personal motivation and board members’ background all have a positive and significant effect on board strategy involvement. The authors also found that CEO power moderates the relationship between board leadership and strategy involvement. The study concludes that when the CEO wields immense power, the board tends to become passive and to submit to the direction of the CEO.

Originality/value

The study adds value to the understanding of the effect of the board leadership on strategic involvement in private firms and how CEO power influences this relationship, particularly in a developing country like Kenya.

Keywords

Citation

Tuwey, J. and Tarus, D. (2016), "Does CEO power moderate the relationship between board leadership and strategy involvement in private firms? Evidence from Kenya", Corporate Governance, Vol. 16 No. 5, pp. 906-922. https://doi.org/10.1108/CG-01-2016-0010

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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