CEO business education and firm financial performance: a case for humility rather than hubris

Abstract

Purpose -The purpose of this paper is to examine the relationship between CEO business education and firm financial performance. Design/methodology/approach -An analysis of the relationship between three-year and fiveyear shareholder return as measured by dividend and change in share price and CEO educational qualification was performed. Findings -No relationship was found between CEO MBA, business, or other qualification and firm financial performance.Research limitations/implications -More research, particularly in the form of multinational longitudinal studies, should be undertaken on the relationship between CEO business and other qualifications and objective outcomes. A limitation of this study is that it was undertaken in one country and measured only firm financial performance. Practical implications -It is possible that business education has been over-emphasized as a prerequisite to successful management practice. It is also possible that the kind of management education that students have received is no longer appropriate to leadership at CEO level. Originality/value -Although many have blamed the GFC on business schools, there has been no examination of the relationship between CEO qualifications and firm financial performance in Australia, and little elsewhere. This study therefore fills a research gap.

Management Background, Intellectual Capital and Financial Performance of Indonesian Bank

“…That means that the test results consistent with the hypothesis given that the hypothesis can be accepted. However, the results in this study are not consistent with research Lindorff and Jonson (2013), which states that no correlation was found between the companies that own CEO, educated MBA or other qualifications with the company's financial performance.…”

CEO characteristics and firm performance: focus on origin, education and ownership

“…However, Gottesman and Morey (2010) used only a market-based measurement-Tobin's q. Furthermore, Lindorff and Jonson (2013) investigated the impact of CEO business education on performance. The findings indicated that CEO business education does not influence firm performance.…”

What characteristics of board of directors affect Indonesian bank performance?

“…However, Darmadi (2013) stated that in Indonesia, high-performing firms were founded and managed by people who were not highly-educated. Lindorff & Jonson (2013) also found that there were no relationship between business educations of Australia's top 200 CEOs and firm financial performance. Another demographic factor that could influence the firm performance is the director's age, as discovered by Amran, Yusof, Ishak, and Aripin (2014).…”