The Effect of Misalignment of CEO Personality and Corporate Governance Structures on Firm Performance

Gordon, Irene M.; Hrazdil, Karel; Jermias, Johnny; Xin, Li

doi:10.3390/jrfm14080375

Cited by 4 publications

(4 citation statements)

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“…Bandiera et al 2020;Saidu 2019;Wei et al 2018;Kaur and Singh 2018a; Weng and Chen 2017;Diks 2016;Amran et al 2014;Peni 2014) documents very similar results, supporting upper echelons theory. Furthermore, empirical studies provide evidence that knowledge about CEO's inherent personality traits, for instance, overconfidence (see Hirshleifer et al 2012;Doukas and Petmezas 2007;Malmendier and Tate 2005), narcissism (see Brouwer 2018;Wang 2016), risk-tolerance (see Gordon et al 2021), military background (see Lin et al 2018;Benmelech and Frydman 2015), and political ideology (see Wei et al 2018;Kashmiri and Mahajan 2017;Unsal et al 2016), among others, are important and relevant for firms to operate efficiently.…”

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confidence: 99%

Impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth: evidence from India

Mukherjee

Sen

2022

Financ Innov

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This article investigates the impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth in India. Using static panel data methodology for a sample of NSE listed leading 138 non-financial companies over the time-frame 2011 to 2018, we find that CEO remuneration and tenure maintains significant positive associations with corporate reputation, while duality and CEO busyness are found to be associated with corporate reputation negatively. The results also show that female CEOs and CEO remuneration are associated with corporate financial performance positively, whereas CEO busyness, as expected, holds a significant negative relationship with corporate financial performance. Moreover, the results demonstrate that CEO age is associated with corporate sustainable growth negatively, while tenure appears to have a significant and positive association with corporate sustainable growth. The results are robust to various tests and suggest that in the Indian context, demographic and job-specific attributes of CEOs exert significant influence on corporate reputation, financial performance, and corporate sustainable growth. The empirical findings would provide a basis for the shareholders and companies to identify areas of consideration when appointing CEOs and determining their roles and responsibilities.

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confidence: 99%

Impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth: evidence from India

Mukherjee

Sen

2022

Financ Innov

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“…This research also has a limitation where personality traits and style of thinking of risk management committee members are not considered. Gordon et al . (2021) also suggest that effective governance mechanism is determined by personality, knowledge, manner and style of thinking (rational or intuitive).…”

Section: Discussionmentioning

confidence: 99%

“…This research also has a limitation where personality traits and style of thinking of risk management committee members are not considered. Gordon et al (2021) also suggest that effective governance mechanism is determined by personality, knowledge, manner and style of thinking (rational or intuitive). Future research is expected to examine the effective risk management committee by characteristics of personality, knowledge, manner and style of thinking (rational or intuitive) by using interviews or questionaries.…”

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confidence: 99%

The role of risk management committee between risk-taking behavior and companies’ performance

Muqorobin

Rani

Simamora

2023

IJPPM

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PurposeThis research aims to examine the moderating role of the existence of risk management committee between risk-taking behavior and companies’ performance.Design/methodology/approachResearch sample includes 383 manufacturing company-year that listed on the Indonesian Stock Exchange period of 2017–2020. The risk-taking behavior includes the use of leverage, capital intensity, research and development intensity, and earnings uncertainty. The hypothesis test uses company fixed-effect regression.FindingsThe result shows that risk management committee moderates the effect of risk-taking behavior on companies’ performance. This research also finds the similar result when risk management committee and risk-taking behavior are examined on the future performance. In the further analysis, the result also finds that the expertise of risk management committee moderates the effect of risk-taking behavior on companies’ performance.Originality/valueThis research contributes to fill the previous gap of risk-taking behavior and companies’ performance by considering the existence of risk management committee to promote oversight role on risk-taking behavior. This research also contributes to give new evidence in Indonesia about the role of risk management committee to improve the benefits or to reduce the costs of risk-taking behavior.

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“…In this configuration, the managers, who effectively control the company, have both the discretion and the incentives to pursue their personal interests at the expense of the shareholders. To alleviate this agency problem, effective corporate governance structures are needed to help align the interests of managers with those of shareholders (Fama and Jensen, 1983; Bebchuk and Weisbach, 2010; Gordon et al , 2021; Faysal et al , 2021; Salehi et al , 2021). In fact, shareholders may demand more control mechanisms to oversee managers to reduce agency costs such as external audits (Anderson et al , 1993), corporate governance and accountability disclosure (Jo and Harjoto, 2011).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

The effect of business ethics and governance score on tax avoidance: a European perspective

Abdelmoula

Chouaibi

2022

IJOES

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Purpose The purpose of this study is to examine the effect of business ethics and governance score on tax avoidance. Design/methodology/approach The sample used consists of 432 European companies belonging to the STOXX600 index during the period ranging from 2010 to 2019. The authors use the linear regression with a panel data. Findings The results show a negative and significant relationship between business ethics and tax avoidance. In addition, the governance is negatively and significantly correlated with tax avoidance. Similarly, this paper finds a negative and significant joint impact of business ethics and governance score on tax avoidance. Practical implications The findings of this paper could help firms consider their future growth opportunities in a context where the approach of business ethics occupies a central position in the business valuation. Originality/value This study is motivated by the low number of works in the context of the tax avoidance. It makes an important contribution to the academic literature through adding to the limited body of research on business ethics and governance score in a company setting. The firms strongly focusing on ethics and governance score are more likely to reduce their tax avoidance activities. Thus, these corporations aim to preserve their reputation and image. In this regard, it is worth saying that a positive reputation can increase the shareholder value. Accordingly, companies find a powerful strategy in their commitment and their ethical and responsible behavior, allowing them to maintain their good image and reputation.

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The Effect of Misalignment of CEO Personality and Corporate Governance Structures on Firm Performance

Cited by 4 publications

References 97 publications

Impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth: evidence from India

Impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth: evidence from India

The role of risk management committee between risk-taking behavior and companies’ performance

The effect of business ethics and governance score on tax avoidance: a European perspective

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