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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…

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

Details

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…

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: 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…

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: 28 February 2022

Clinton Longenecker and Jenell Lynn-Senter Wittmer

This study answers the question, “What are the learning experiences and drivers that provide CEOs with the knowledge, skills, and abilities that will allow them to lead…

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Abstract

Purpose

This study answers the question, “What are the learning experiences and drivers that provide CEOs with the knowledge, skills, and abilities that will allow them to lead their enterprises through crises?”

Design/methodology/approach

Thirty chief executive officer (CEO) interviews were conducted with two trained interviewers that lasted an average of 76 min. These interviews covered CEO experiences in challenges faced, adaptation, learning and lessons gleaned during the COVID-19 pandemic.

Findings

The interview responses were content analyzed to provide ten main drivers of CEO learning during the pandemic.

Originality/value

The size and scope of the pandemic provides for lessons on leadership learning never experienced before. This study provides in-depth insights from CEO experiences during the pandemic.

Details

Strategic HR Review, vol. 21 no. 2
Type: Research Article
ISSN: 1475-4398

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Article
Publication date: 24 January 2023

Conrado Diego García-Gómez, Marina Zavertiaeva and Félix J. López Iturriaga

This paper aims to study the impact of CEOs’ personality and social connections on corporate risk-taking in the Russian market.

Abstract

Purpose

This paper aims to study the impact of CEOs’ personality and social connections on corporate risk-taking in the Russian market.

Design/methodology/approach

Using a sample of 93 large listed Russian corporations between 2008 and 2016, this study tests a range of personal traits, including the classical personal characteristics like age and tenure, some country-specific traits such as connections and military experience, as well as other human and social capital characteristics.

Findings

This study finds non-linear relationships between corporate risk-taking and CEO age and tenure. This study also finds that firms run by CEOs with military experience take more corporate risk. On the CEOs’ social capital side, this study’s results suggest that both political and educational connections are positively related to corporate risk-taking.

Originality/value

This study also tests some traits that have usually been ignored by the literature, such as marital and family status.

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: 2 February 2023

Md Noman Hossain and Md Nazmul Hasan Bhuyan

The extant literature provides evidence that single CEOs are less risk-averse. Building on the theory of risk aversion, the authors argue that the risk aversion trait…

Abstract

Purpose

The extant literature provides evidence that single CEOs are less risk-averse. Building on the theory of risk aversion, the authors argue that the risk aversion trait arising from CEO’s marital status partially explains capital allocation efficiency. The paper aims to examine the association between CEO marital status and capital allocation efficiency.

Design/methodology/approach

The primary sample includes 9,671 observations from 1,264 US firms. The authors apply multivariate regression and a series of endogeneity tests to examine the association between CEO marital status and capital allocation efficiency.

Findings

Single-CEO firms have higher capital allocation inefficiency than those with married CEOs. The findings continue to hold after a series of endogeneity tests such as propensity score matching, change analysis and instrumental variable regression analysis and are robust to alternative proxies for capital allocation inefficiency. The capital allocation inefficiency in single-CEO firms arises from overinvestment but not underinvestment, and corporate risk-taking channels the effect.

Research limitations/implications

The study is limited to the effect of CEO marital status, not CEO marital quality.

Practical implications

The findings imply that besides information asymmetry and agency conflicts, CEO marital status should receive special attention for capital allocation efficiency. Also, marital status influences the CEOs’ commitment to the general good of society, affecting the potential conflict of interest with different stakeholders from inefficient capital allocation.

Originality/value

This study extends corporate finance literature on CEO marital status by providing novel evidence on the effect of single CEOs on capital allocation efficiency. The authors conclude that CEOs’ personality traits, such as marital status, matter in corporate policy choices.

Details

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: 2 February 2023

Salah Aldain Abdullah Alshorman and Martin Shanahan

The purpose of this study is to explore whether the level of language content matching (LCM) between the chair and the CEO varies with their firm's financial performance.

Abstract

Purpose

The purpose of this study is to explore whether the level of language content matching (LCM) between the chair and the CEO varies with their firm's financial performance.

Design/methodology/approach

This study examines a sample of 119 Australian firms and 476 annual letters to shareholders produced by the firms' chairs and CEOs over a four-year period. Chair–CEO LCM is measured by calculating the similarity score between the chair's and CEO's written text to shareholders within each firm year, while firm profitability is measured by return on assets. Univariate analysis of variance (ANOVA) tests as well as three multivariate linear models are used to examine the research question.

Findings

The results show that the profitability of the firm is significantly associated with the level of chair–CEO LCM. When a firm is profitable, there is a lower level of chair–CEO LCM than when the firm is unprofitable and that profitability is related to a lower level of chair–CEO LCM. Firm size is positively and significantly related to the level of chair–CEO LCM. These findings are supportive of the view that the written communications of the chair and CEO are the outcome of strategic considerations and depend on a firm's specific economic situation.

Research limitations/implications

Future studies may consider alternative approaches to measure textual similarity.

Social implications

LCM may provide insights into management techniques that may be used to explain firm performance and provide a signal to external stakeholders, such as shareholders and fund managers.

Originality/value

This study provides new insights into the letters written by the chair and the CEO to explain or justify their firm's financial performance. Rather than focus on a single letter, this study examines the level of LCM between the shareholder letters of two different people in a firm (the chair and CEO) and finds that the extent of chair–CEO LCM is varying with firm performance and size. The findings of this study suggest that LCM is an important dimension of the communications of a firm's chair and CEO.

Details

Corporate Communications: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 15 July 2021

Haynes Cooney, Peter Korsten and Anthony Marshall

The recent IBM Institute for Business Value CEO survey of 3,000 chief executives globally offers insight into CEO attitudes and behaviors in order to discern the…

Abstract

Purpose

The recent IBM Institute for Business Value CEO survey of 3,000 chief executives globally offers insight into CEO attitudes and behaviors in order to discern the strategies and actions most highly correlated to successful digital transformation and performance.

Design/methodology/approach

The IBM Institute for Business Value, in collaboration with the Oxford Economics, surveyed 3,000 CEOs and senior public sector executives between September and November 2020. The analysis identified a group of CEOs whose outlook on transformation and success with digital implementation sets them apart from others.

Findings

These Dynamic CEOs, who represent 38 percent of all commercial leaders in the IBM IBV research, shared two crucial insights: that traditional business models no longer differentiate their organizations; their organization?s digital transformation journey will never be complete.

Practical/implications

These Dynamic CEOs are almost 70 percent more likely to lead high performing organizations than other top leaders.

Originality/value

Almost 90 percent of Dynamic CEOs expect their business and IT investments to deliver a material improvement in business performance over the next three years, with the greatest emphasis on investments in customer experience improvement, decision-making processes and business agility.

Details

Strategy & Leadership, vol. 49 no. 4
Type: Research Article
ISSN: 1087-8572

Article
Publication date: 19 August 2021

Thomas Covington, Steve Swidler and Keven Yost

The previous literature finds evidence from birth dates of CEOs that the relative-age effect continually influences their career success. The authors look at a…

Abstract

Purpose

The previous literature finds evidence from birth dates of CEOs that the relative-age effect continually influences their career success. The authors look at a significantly larger collection of CEOs and more exact information on school cut-off dates to reexamine the relative-age effect.

Design/methodology/approach

The relative-age effect suggests that older individuals within a cohort are more successful. This study investigates if the relative-age effect exists for CEOs in the S&P 1500 by analyzing the distribution of their relative age. The authors utilize an identification strategy that allows to calculate a CEO's relative age in months and enables to resolve known identification problems.

Findings

The authors find no support for the existence of the relative-age effect for CEOs either by season of birth or relative age in months. On the whole, the distribution of CEO birth dates is similar to the US population. Additionally, the authors find no evidence of a relative-age effect on firm performance.

Practical implications

Contrary to previous findings, there appears to be no relative-age cohort effect for CEOs of major corporations.

Originality/value

Research shows that CEO characteristics shape firm strategy that in turn affects firm performance. Despite previous work that suggests a relative-age effect, the authors provide a more comprehensive data set and better measurement of relative-age within a cohort. The authors find that the relative-age effect does not continue throughout a CEO's career, and therefore, birth dates are not a characteristic that influences firm strategy and performance.

Details

Managerial Finance, vol. 48 no. 1
Type: Research Article
ISSN: 0307-4358

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