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Book part
Publication date: 19 March 2018

Naseem Ahamed and Nitya Nand Tripathi

Change of leadership is a big and important incident in the life of a company. As important as it is for the company, it is equally a difficult decision to make for the board of…

Abstract

Change of leadership is a big and important incident in the life of a company. As important as it is for the company, it is equally a difficult decision to make for the board of directors. Most of the big companies have a committee dedicated toward laying out a succession plan of the existing chief executive officer (CEO). The big dilemma, however, is whether to appoint someone from within the company and let him or her lead as he or she has been associated with the company and knows the internal dynamics better or to induct some outsider and take advantage of his or her expertise/reputation in the market. The balance appears lopsided when the result of this chapter is perused. Companies on an average seem to reap more benefits if an existing executive is promoted to the office of CEO rather than hiring an outsider. The benefits which are talked here from promoting insiders are indirect ones and do not have a direct bearing with the finances of the company. As shown by the results that insiders are more likely to continue with the company for a longer duration as the CEO as well as not as the CEO which defers the hiring and firing costs (screening candidates, conducting interviews, huge severance packages, golden parachutes, etc., are the costs referred to) for a longer period. Other benefits arising from insider CEOs are upfront awareness about the company’s work culture, production/service capacity, efficiency, strategies followed till date, etc., which gives him or her a head start compared to an outsider.

Details

Global Tensions in Financial Markets
Type: Book
ISBN: 978-1-78714-839-0

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Abstract

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The Theory and Practice of Directors’ Remuneration
Type: Book
ISBN: 978-1-78560-683-0

Book part
Publication date: 1 November 2008

Atreya Chakraborty and Shahbaz Sheikh

This study investigates the impact of corporate governance mechanisms on performance related turnover. Our results indicate that smaller boards and institutional block holders are…

Abstract

This study investigates the impact of corporate governance mechanisms on performance related turnover. Our results indicate that smaller boards and institutional block holders are positively related to the likelihood of performance related turnover. CEOs that also hold the position of the chairman of the board or belong to a founding family face lower likelihood of turnover. CEO stock ownership is negatively related to turnover and CEOs who own 3 percent or more of their company stock face a significantly lower likelihood of performance related turnover. Moreover, protection from external control market has no effect either on the likelihood of turnover.

Details

Institutional Approach to Global Corporate Governance: Business Systems and Beyond
Type: Book
ISBN: 978-1-84855-320-0

Article
Publication date: 24 May 2023

John Oliver

This paper argues that certain CEO characteristics are a significant predictor of relative firm R&D spending and innovation performance and that executive boards need to be remain…

Abstract

Purpose

This paper argues that certain CEO characteristics are a significant predictor of relative firm R&D spending and innovation performance and that executive boards need to be remain vigilant of their CEO’s performance by ensuring that they have the capabilities to drive innovation-led growth strategies.

Findings

The successful economic recovery from the global pandemic will be founded on the type of innovation-led growth that takes advantage of opportunities presented by a profoundly different competitive landscape. This paper demonstrates that certain CEO characteristics (age, education, career experience) are a significant predictor of relative firm R&D spending and innovation performance.

Practical implications

CEO performance is an increasingly important issue for many executive boards who are tasked with assessing whether or not incumbent CEOs and potential new CEO hires are equipped with the skills to drive innovation-led growth strategies. The findings will help executive board members and headhunting agencies to assess a CEO’s orientation toward innovation.

Originality/value

This paper presents a review of how certain CEO characteristics act as a predictor of relative firm R&D spending and innovation. It presents the main findings from both academic and business sources in a way that is easily accessible to executive boards, senior management and headhunting agencies.

Details

Strategy & Leadership, vol. 51 no. 4
Type: Research Article
ISSN: 1087-8572

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Article
Publication date: 5 March 2024

Mahmoud Agha, Md Mosharraf Hossain and Md Shajul Islam

This study examines the impact of chief executive officer (CEO) power, institutional investors and their interaction on green financing provided by Bangladeshi financial…

Abstract

Purpose

This study examines the impact of chief executive officer (CEO) power, institutional investors and their interaction on green financing provided by Bangladeshi financial institutions and the moderating effect of government policy and CEO political connections on these relations.

Design/methodology/approach

We employ ordinary least squares (OLS) regressions and interaction terms among variables of interest for the empirical analysis.

Findings

Green financing decreases with CEO power, implying that CEOs of this country’s financial institutions are averse to green loans, whereas institutional investors increase green financing extended by these institutions. The government policy, which includes financial incentives for complying financial institutions, strengthens institutional investors' positive impact on green financing, but it does not change CEOs' aversion to green loans. Institutional investors have a positive moderating effect on the relationship between green finance (GF) and CEO power, but this positive moderating effect is negated in banks where the government owns a stake, possibly because CEOs of state-owned financial institutions are politically connected, which reduces institutional investors’ influence over them.

Originality/value

This study is unique in that it is the first to examine how the interaction among different stakeholders affects green financing in a unique setting. As the literature is almost silent on this topic, the findings of this paper are expected to raise policymakers’ awareness of the obstacles that hamper the efforts of developing countries to go green.

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International Journal of Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 15 March 2024

Yawen Shan, Da Shi and Shi Xu

Based on imprinting theory and episodic future thinking, this paper aims to study how CEOs’ attributes and experiences inform innovation in tourism and hospitality businesses. It…

Abstract

Purpose

Based on imprinting theory and episodic future thinking, this paper aims to study how CEOs’ attributes and experiences inform innovation in tourism and hospitality businesses. It also explores ways to quantify innovation in this sector.

Design/methodology/approach

The authors quantitatively analysed innovation in tourism and hospitality using extensive data from companies’ annual reports. They further adopted multivariate regression to test how CEOs’ experience affects enterprise innovation.

Findings

Results demonstrate that CEOs’ academic education and rich work experience can promote corporate innovation. The authors also identified a mediating role of the tone of narrative disclosure in annual reports between CEOs’ academic education and corporate innovation. The imprinting effects of career experience and educational experience appear both independent and interactive.

Research limitations/implications

CEOs are more inclined to engage in corporate innovation when influenced by the combined imprinting effects of strategic management training and work experience. Additionally, leaders should consider how communication styles indirectly influence innovation activities.

Originality/value

This paper introduces an integrated perspective that blends imprinting theory and episodic future thinking to bridge knowledge gaps regarding the interaction of CEOs’ past experiences. This work enhances understanding of how CEOs’ imprinted experiences, together with their capacity for envisioning future scenarios, can drive corporate innovation.

Details

International Journal of Contemporary Hospitality Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-6119

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Article
Publication date: 1 July 2022

Xin Kuang, Bifeng Yin, Jian Wang, Hekun Jia and Bo Xu

The purpose of this paper is to evaluate the dispersion stability and the wear properties of lubricating oil blends added with modified nanometer cerium oxide (CeO2) at high…

Abstract

Purpose

The purpose of this paper is to evaluate the dispersion stability and the wear properties of lubricating oil blends added with modified nanometer cerium oxide (CeO2) at high temperature.

Design/methodology/approach

In this paper, CeO2 was self-made and it was chemically modified. The dispersion stability of CeO2 in lubricating oil was studied. And the wear test of lubricating oil blends added with modified CeO2 was carried out at high temperature.

Findings

The results showed that CeO2 was successfully modified by oleic acid and stearic acid. The dispersion stability of modified CeO2 in lubricating oil was improved. Adding modified nano-CeO2 with the concentration less than 50 ppm into the lubricating oil can improve the wear properties of friction pairs in different extent. With the increase of the amount of CeO2, the wear properties increased first and then decreased. The lubricating oil blend added with 25 ppm CeO2 has the best wear properties.

Originality/value

The raw material CeO2 in this paper is self-made and its shape and size are well controlled. Research on the addition of nano-CeO2 to the engine low viscosity finished lubricants is lacking. It is of great significance to study the dispersion stability and tribological properties of nano-lubricants under the new background of low viscosity of lubricating oil and close to the real engine working conditions. It has certain significance to promote the development of nano-lubricants for engines.

Details

Industrial Lubrication and Tribology, vol. 74 no. 7
Type: Research Article
ISSN: 0036-8792

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Article
Publication date: 21 February 2024

Sam Yul Cho and Yohan Choi

Research has focused primarily on the antecedents that influence the risk taking of CEOs themselves. This study examines how an important event experienced by a CEO at a direct…

Abstract

Purpose

Research has focused primarily on the antecedents that influence the risk taking of CEOs themselves. This study examines how an important event experienced by a CEO at a direct rival firm influences a CEO's risk-taking. It also examines how prior firm performance relative to aspirations moderates the relationship.

Design/methodology/approach

In order to test the hypothesis, the authors perform an a difference-in-differences methodology.

Findings

Using a difference-in-differences methodology, we find that when a CEO wins a prestigious CEO award, competitor CEOs increase their firm risk-taking in the post-award period. The proclivity becomes stronger when their prior firm performance relative to aspirations is better. These findings suggest that a CEO winning a prominent CEO award influences competitor CEOs' risk-taking.

Originality/value

This study contributes to the literature on managerial risk-taking by highlighting that a star CEO winning a prominent award may serve as a striving aspiration and induce competitor CEOs to take risks, and that two different types of aspirations – striving and competitive aspirations – interact to influence the competitor CEOs' risk-taking.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 7 February 2024

Yuri Gomes Paiva Azevedo, Mariana Câmara Gomes e Silva and Silvio Hiroshi Nakao

The purpose of this study is to examine the moderating effect of an exogenous corporate governance shock that curbs Chief Executive Officers’ (CEOs) power on the relationship…

Abstract

Purpose

The purpose of this study is to examine the moderating effect of an exogenous corporate governance shock that curbs Chief Executive Officers’ (CEOs) power on the relationship between CEO narcissism and earnings management practices.

Design/methodology/approach

The authors performed a quasi-experiment using a differences-in-differences approach to examine Brazil’s duality split regulatory change on 101 Brazilian public firms during the period 2010–2022.

Findings

The main findings indicate that the introduction of duality split curtails the positive influence of CEO narcissism on earnings management, suggesting that this corporate governance regulation may act as a complementary corporate governance mechanism in mitigating the negative consequences of powerful narcissistic CEOs. Further robustness checks indicate that the results remain consistent after using entropy balancing and alternative measures of CEO narcissism.

Practical implications

In emerging markets, where governance systems are frequently perceived as less than optimal, policymakers and regulatory authorities can draw insights from this enforcement to shape governance systems, reducing CEO power and, consequently, improving the quality of financial reporting.

Originality/value

To the best of the authors’ knowledge, this is the first study to examine whether a duality split mitigates the influence of CEO narcissism on earnings management. Thus, this study contributes to the corporate governance literature that calls for research on the effectiveness of external corporate governance mechanisms in emerging markets as well as the CEO narcissism literature that calls for research on moderating factors that could curtail negative consequences of narcissistic CEO behavior.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 5 February 2024

Elena Fedorova, Alexandr Nevredinov and Pavel Drogovoz

The purpose of our study is to study the impact of chief executive officer (CEO) optimism and narcissism on the company's capital structure.

Abstract

Purpose

The purpose of our study is to study the impact of chief executive officer (CEO) optimism and narcissism on the company's capital structure.

Design/methodology/approach

(1) The authors opt for regression, machine learning and text analysis to explore the impact of narcissism and optimism on the capital structure. (2) We analyze CEO interviews and employ three methods to evaluate narcissism: the dictionary proposed by Anglin, which enabled us to assess the following components: authority, superiority, vanity and exhibitionism; count of first-person singular and plural pronouns and count of CEO photos displayed. Following this approach, we were able to make a more thorough assessment of corporate narcissism. (3) Latent Dirichlet allocation (LDA) technique helped to find the differences in the corporate rhetoric of narcissistic and non-narcissistic CEOs and to find differences between the topics of interviews and letters provided by narcissistic and non-narcissistic CEOs.

Findings

Our research demonstrates that narcissism has a slight and nonlinear impact on capital structure. However, our findings suggest that there is an impact of pessimism and uncertainty under pandemic conditions when managers predicted doom and completely changed their strategies. We applied various approaches to estimate the gender distribution of CEOs and found that the median values of optimism and narcissism do not depend on sex. Using LDA, we examined the content and key topics of CEO interviews, defined as positive and negative. There are some differences in the topics: narcissistic CEOs are more likely to speak about long-term goals, projects and problems; they often talk about their brand and business processes.

Originality/value

First, we examine the COVID-19 pandemic period and evaluate how CEO optimism and pessimism affect their financial decisions under specific external conditions. The pandemic forced companies to shift the way they worked: either to switch to the remote work model or to interrupt operations; to lose or, on the contrary, attract clients. In addition, during this period, corporate management can have a different outlook on their company’s financial performance and goals. The LDA technique helped to find the differences in the corporate rhetoric of narcissistic and non-narcissistic CEOs. Second, we use three methods to evaluate narcissism. Third, the research is based on a set of advanced methods: machine learning techniques (random forest to reveal a nonlinear impact of CEO optimism and narcissism on capital structure).

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

Keywords

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