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We develop and test theory regarding the effect of CEO paranoia, defined as stable tendencies toward suspicion, feelings of ill will or resentment, mistrust, and belief in external control or influence, on firm stakeholder engagement. We theorize that because CEOs higher in paranoia have tendencies toward hypervigilance and the biases of self-as-target and sinister attributions they typically avoid engagement with external stakeholders. Further, we argue that CEOs higher in paranoia are subject to paranoid activation when confronted with trait-relevant cues that confirm suspicions of being targeted by a malevolent external entity (here, regulatory rulings or rival attacks), thus eliciting a shift away from avoidance to a more aggressive engagement with those stakeholders. To do so, we develop a content-analytic measure of CEO paranoia following both theory and evidence in psychology and methodological best practices, finding evidence that broadly supports our premise. In total, our study draws attention to how the manifestation of CEO paranoia changes the way CEOs engage stakeholders over time, contributing to understanding in multiple ways. [ABSTRACT FROM AUTHOR]

We develop a theory of non-monetary costs incurred by chief executive officers (CEOs) when deciding about layoffs and test its predictions on French data. Our results support the idea that, being embedded in their social environment, CEOs find it more difficult to fire employees closer to their own workplace. This effect is stronger whenever social interactions are less anonymous in the CEOs' local environment. It is weaker when CEOs live further away from where they work, because of limited exposure to local discontent. [ABSTRACT FROM AUTHOR]

This paper investigates the game-changing paradigm in modern manufacturing, known as the "smart factory," from an organizational perspective. Factories get smarter—or smartized—by becoming more data-intensive and more tightly integrating operations with management. We design a unique survey to measure this intangible organizational capital accumulation process for 939 Korean manufacturing plants. Observing heterogeneous levels of smartization across factories, we explore their relationship with three performance dimensions: productivity, cost efficiency, and product variety. The drivers of smartization are also identified. Our analysis uncovers a strong association between smartization and heightened productivity, with varying interactions with other performance metrics based on the specific manufacturing process (e.g. lower defect rate only in assembly line process). Importantly, we find that investments in digital technologies drive smartization only when complemented by structured incentive management and proper chief executive officer (CEO) leadership. [ABSTRACT FROM AUTHOR]

Using a sample of Chinese listed firms from 2007 to 2017, this study investigates the impact of trust on corporate innovation. We find that firms located in provinces with higher trust levels have both higher innovation inputs and outputs, indicating trust plays an important role in promoting corporate innovation. We further document that this association is more pronounced for firms with a higher degree of information asymmetry between boards and managers, and when CEOs have stronger incentives to engage in opportunistic behavior in innovation activities. In addition, we find that forced CEO turnover-performance sensitivity is lower and managers are less likely to underinvest in R&D in high trust areas, suggesting trust enhances corporate innovation through relationship alignment between shareholders and managers. We also find that trust promotes not only the quantity but also the quality of corporate innovation. Our study complements existing research that investigates factors encouraging corporate innovation and extends a growing body of literature that examines the impact of trust on corporate decisions. [ABSTRACT FROM AUTHOR]

In this study, we investigate whether and how trust between board members and the CEO (board–CEO trust) affects the performance of mergers and acquisitions. Contrary to conventional wisdom, we find that firms with higher levels of board–CEO trust exhibit poor M&A performance. High trust is associated with low acquisition announcement returns, long-term stock return performance, and post-deal operating performance. This negative effect of board–CEO trust is more pronounced among acquiring companies prone to agency problems. Our results suggest that, in the institutional setting of corporate boards, high trust can be too much of a good thing. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The leaders of business are a continued focus of interest in management research and in the broader society. Their attributes speak to social mobility, inequality, and who holds positions of power and influence in society. This article examines the attributes of the ten highest-ranked executives of the largest corporate enterprises in the United States—the Fortune 100—and compares how they have changed over the past 40 years, a period when many assumptions about businesses and the people who run them have changed. While there has been significant change in some areas, such as the increase in the proportion of women and foreign-born executives and the rise in outside hiring, there is no evidence of an increase in younger leaders who advance faster than their predecessors and spend an ever-shorter time with their employer. In fact, top executives now are as old as their peers were in the 1950s, and their tenure with their employer is rising. [ABSTRACT FROM AUTHOR]

Previous literature on the engagement quality (EQ) review argues that EQ reviewers should provide more efforts into the review process when fieldwork auditors' judgments and conclusions on the financial statements are potentially biased. Little empirical study has been done, however, partly due to the confidentiality of the detailed data on EQ reviewers' audit hours. The purpose of the article is to shed light on the existing literature by conducting an empirical investigation using a unique actual data set available in Korea. The results show that the EQ review hours are positively associated with CEO turnovers, a proxy for the audit risk, which supports the prediction of the theory on the EQ review. Additional analyses show that such results are stronger under (a) the upward earnings management and (b) the forced CEO turnover. The article extends the existing literature on the EQ review process and enhances the understanding of the engagement-level quality control in the volatile audit environment by providing empirical evidence to the analytic discussions on the EQ review. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article uses FAS 123R regulation to examine how reduction in CEO compensation incentives affects managerial "playing it safe" behavior. Using proxies reflecting deliberate managerial efforts to change firm risk, difference-in-difference tests show that affected firms drastically reduce both systematic and idiosyncratic risks, leading to an 8% decline in total firm risk. These reductions in risk are achieved by shifting to safer, but low-Q, segments while closing the riskier ones, without significant changes in investment levels. Our findings suggest that decrease in risk-taking incentives provided by option compensation, when not compensated for by alternative incentives or governance mechanisms, exacerbates risk-related agency problem. [ABSTRACT FROM AUTHOR]

We document that firms that expect their CEOs' compensation to exceed the median CEO compensation of their Institutional Shareholder Services (ISS) peers influence ISS to revise these peer sets. Controlling for changes in firm characteristics that ISS uses to select peers, we find that ISS applies an abnormally high turnover rate in the members of these peer sets and increases the representation of focal firms' chosen peers. This turnover results in increases in the medians of the ISS peers' CEO compensation and size. We find that these firms underperform and conclude that they attempt to camouflage high CEO pay to mitigate outrage costs. [ABSTRACT FROM AUTHOR]

Using Chinese data, we examine whether synchronous remote board meetings, which facilitate status equalization among directors and alleviate their pressure for conformity, affect board monitoring effectiveness. We find that compared to face-to-face meetings, synchronous remote meetings are associated with directors' better meeting attendance behavior, a higher likelihood of director dissent on monitoring-related proposals, higher forced CEO turnover-performance sensitivity, and more effective investments. These results hold when we use remote meetings that include both synchronous and asynchronous remote meetings. Proposal-director level analysis further shows that remote meetings reduce the pressure to conform faced by young first-term directors and socially connected directors. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Management incentives for engaging and excelling in corporate social responsibility (CSR) performance is an important theme as business sustainability gains momentum. We examine the role of tournament incentives, which are created by competition among non-CEO (chief executive officer) senior executives (vice presidents [VPs]) for promotion to the CEO position, in firms' CSR performance. Using a sample of U.S. Standard & Poor (S&P) 1500 firms from 1993 to 2014, we find that tournament incentives proxied by pay gaps between CEOs and VPs are negatively associated with CSR performance, suggesting that competition for promotion could be detrimental for CSR performance. We further show that such association is more pronounced when the perceived probability of promotion increases prior to CEO turnover. This article provides policy, practical, and education implications and contribute to the literature on the integration of CSR into the business culture and strategic management processes. [ABSTRACT FROM AUTHOR]

This article examines whether and how stock mispricing can affect the probability of CEO turnover. In a sample of 1,573 US public firms, I find that, after controlling for fundamental performance, a 1-standard-deviation negative uninformative stock price shock increases the likelihood of CEO turnover by 10%. The mispricing-turnover sensitivity is stronger at firms with an independent board, and a difference-in-difference analysis further supports that finding. Ancillary results suggest that independent directors' career concerns may play a role in the response of independent boards to mispricing. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In the article there is an analysis of the difference of powers of the Board Chair, Chief Executive Officer and Company Secretary under the one-tier corporate governance structure in Ukraine, also the legal nature of the formalization of their duties. The article objective is to establish and articulate the differences of their powers, which is achieved through the study and analysis of legislative acts and relevant scientific researches. It has been determined that the election of the Board Chair and the Chief Executive Officer must take place at the first meeting of the newly elected Board of Directors, while the appointment of the Corporate Secretary occurs upon the appearance of this position. It has been established that the Board Chair and the Chief Executive Officer are elected by the Board of Directors, while the Corporate Secretary is appointed by the Board. The author examines the role of the Board Chair in corporate governance and concludes that the Chair convenes the Board, presides over its meetings, and signs the meeting minutes. It is also noted that, during such meetings, the Board Chair may have the right to a casting vote in the event of a tie among the Board members, as specified in the corporate charter document. The author examines the role of the Chief Executive Officer in corporate governance and concludes that the CEO represents the interests of the corporation, performs legally significant actions on its behalf without the need for a power of attorney, including transactions, and issues orders and directives that are mandatory for all employees of the corporation. It is also noted that the use of the term «ordinary daily activities of the corporation» in paragraph 3 of part two of Article 65 of Law № 2465-IX, the literal interpretation of which could unpredictably limit the powers of the Chief Executive Officer, does not meet the «quality of law» criterion. The article suggests to harmonize the terminology used in Laws № 2465-IX and № 2275-VIII. The author examines the role of the Corporate Secretary in corporate governance and concludes that the Corporate Secretary facilitates the coordination of the Board of Directors and its committees, and the exchange of information between the Board, shareholders, and other stakeholders of the corporation. It is also noted that the Corporate Secretary cannot be a member of the Board of Directors. The article specifies that the Board Chair, the Chief Executive Officer, and the Corporate Secretary are all officials. [ABSTRACT FROM AUTHOR]

Background: In recent years, organizational leaders have faced growing pressure to respond to social and political issues. Although previous research has examined the experiences of corporate CEOs engaging in these issues, less is known about the perspectives of healthcare leaders. Objective: To explore the experiences of healthcare CEOs engaging in health-related social and political issues, with a specific focus on systemic racism and abortion policy. Design: Qualitative study using semi-structured interviews from February to July 2023. Participants: CEOs of US-based hospitals or health systems. Approach: One-on-one interviews which were audio recorded, professionally transcribed, and analyzed using thematic analysis. Key Results: This study included 25 CEOs of US-based hospitals or health systems. Almost half were between ages 60 and 69 (12 [48%]), 19 identified as male (76%), and 20 identified as White (80%). Approximately half self-identified as Democrats (13 [55%]). Most hospitals and health systems were private non-profits (15 [60%]). The interviews organized around four domains: (1) Perspectives on their Role, (2) Factors Impacting Engagement, (3) Improving Engagement, and (4) Experiences Responding to Recent Polarizing Events. Within these four domains, nine themes emerged. CEOs described increasing pressure to engage and had mixed feelings about their role. They identified personal, organizational, and political factors that affect their engagement. CEOs identified strategies to measure the success of their engagement and also reflected on their experiences speaking out about systemic racism and abortion legislation. Conclusions: In this qualitative study, healthcare CEOs described mixed perspectives on their role engaging in social and political issues and identified several factors impacting engagement. CEOs cited few strategies to measure the success of their engagement. Given that healthcare leaders are increasingly asked to address policy debates, more work is needed to examine the role and impact of healthcare CEOs engaging in health-related social and political issues. [ABSTRACT FROM AUTHOR]

Based on upper echelon theory, we employ machine learning to explore how CEO characteristics influence corporate violations using a large-scale dataset of listed firms in China for the period 2010–2020. Comparing ten machine learning methods, we find that eXtreme Gradient Boosting (XGBoost) outperforms the other models in predicting corporate violations. An interpretable model combining XGBoost and SHapley Additive exPlanations (SHAP) indicates that CEO characteristics play a central role in predicting corporate violations. Tenure has the strongest predictive power and is negatively associated with corporate violations, followed by marketing experience, education, duality (i.e., simultaneously holding the position of chairperson), and research and development experience. In contrast, shareholdings, age, and pay are positively related to corporate violations. We also analyze violation severity and violation type, confirming the role of tenure in predicting more severe and intentional violations. Overall, our findings contribute to preventing corporate violations, improving corporate governance, and maintaining order in the financial market. [ABSTRACT FROM AUTHOR]

Despite numerous chief executive officers (CEOs) citing their religious convictions as the primary guiding framework for their decision-making, leadership behavior, business philosophy, and motivation to contribute to society, the impact of CEOs' religious convictions is relatively limited in the business literature. However, the widespread yet potentially ambiguous impact of CEO religiosity, encompassing both a CEO's religious denomination and level of religiosity, on individual, organizational, economical, and societal levels remains a neglected area of research. This gap is attributed to challenges in conceptualizing and measuring this multifaceted construct, with existing research scattered and predominantly confined to the ethics domain. Notably, this oversight is significant given the pivotal role that CEOs, as primary decision-makers, play in organizational dynamics. This article aims to address this gap by conducting a systematic literature review of 50 articles focused on CEO religiosity, seeking to enhance the understanding of personal religion in the business world. Through an analysis of publication trends, methodological approaches, theoretical frameworks, and empirical findings, the review not only offers insights for future research and theorizing but also proposes a conceptual framework for understanding and advancing CEO religiosity research. Additionally, this review identifies specific areas warranting further investigation, thereby highlighting existing research gaps and providing explicit starting points for future research. Through these contributions, this article provides a blueprint for future research on CEO religiosity and holds significant implications for management practice. [ABSTRACT FROM AUTHOR]

Studies linking religion to CSR have produced conflicting findings due to a failure to draw distinctions among religious influences and different CSR practices, and to theorize their connection. Drawing on social identity theory and the theory of planned behavior, we first argue that religion will influence CSR when ethical values from a CEO's religious social identification resonate with an aspect of CSR. Second, CEO attitudes congruent with those values and forms of CSR—interpersonal empathy and proactiveness—will strengthen that relationship. Third, the relationship between religious social identification and CSR will be strengthened by a CEO's ability to enact CSR policies, a function of personal and firm market power. Our research on 270 CEOs from 242 publicly traded US firms from 2007 to 2020 supports these relationships. [ABSTRACT FROM AUTHOR]

In the present study, the author examines how the lack of funding can impact the administration and the organisational efficiency of technical vocational education and training (TVET) institutions (I). The research examines human capital development and TVET as instruments for propelling growth and development and contributing to Trinidad and Tobago's (T&T) economic and social advancements. The study explored how TVETIs can be a central pillar in the progress of T&T's development. The research material consists of 10 interviews with educational experts from four postsecondary TVETIs in T&T and the chief executive of T&T TVET's regulatory body. Focus groups and individual interviews were conducted with the leading regulator, instructors, managers, and a curriculum expert. The author utilised thematic analysis in the research by adopting a deductive approach. The data revealed several challenges that engulf the administration and management of TVETI in T&T, mainly because of financial woes. Three themes emerged from the data: Funding for Administration, Funding for Human Capital Development and Funding for Organisational Efficiency. Insightful revelations were unearthed from the educational experts, which were generated from the data which provide an in-depth perspective on the administration and management of TVET in T&T. The results show that T&T's education experts see funding as a significant challenge. Many argue that a lack of funding severely impacts their institutions, which erodes human capital development growth. The study concludes that a lack of funding can severely and has impacted TVET in several ways. An absence or a lack of funding brought the closure of top-notch schools used in the training and growth of teachers for the educational system. Human capital development and TVET were also highlighted as essential tools for economic and social deprivation. However, a better approach is needed to finance TVET moving forward. [ABSTRACT FROM AUTHOR]

This paper empirically examines the relationship between CEO (Chief Executive Officer) social capital and corporate ESG (Environment, Social and Governance) performance. Using a sample of A-share listed companies in Shanghai and Shenzhen from 2010 to 2020, the paper finds a negative correlation between CEO social capital and corporate ESG performance. In addition, we also consider how the firm's market trading activity and CEO duality moderates the impact of CEO social capital on firms' ESG, and both are concluded to be positively moderated. Upon further research, we also find that (1) the positive contribution of CEO's social capital to firms' ESG performance is more significant in state-owned enterprises. (2) The negative facilitating effect of CEO's social capital on corporate ESG performance is more significant in large-scale enterprises. (3) ESG practices lead to the loss of shareholder wealth, resulting in the reduction of corporate value. The results of the study deepen the knowledge of academics and practitioners about the value-creating function of CEO social capital, and provide empirical evidence for listed companies to pay attention to and make use of CEO social capital to enhance their corporate social responsibility commitment. [ABSTRACT FROM AUTHOR]

Existing research shows that luck increases CEOs' pay at their current firm. In this work, we explore how luck affects: (1) CEOs' employment opportunities and (2) the performance of firms that hire lucky CEOs. Our results indicate that luck increases the likelihood to get a CEO job at new companies. Conditional on moving, lucky CEOs obtain a higher pay (both in absolute terms and relative to new industry peers) mostly due to higher incentive pay. Moreover, lucky CEOs tend to be hired by firms operating in less competitive industries. Despite the higher compensation they receive, the appointment of lucky CEOs is associated with a substantial decline in firm performance. (JEL : G34, D86, J33, M12) [ABSTRACT FROM AUTHOR]

Purpose: Executive isolation, also known as workplace loneliness, its factors and impact are major issues for organizational development, future of work for leadership and learning culture. The purpose of this study is to examine the Executive isolation phenomenon where relationships between power distance, organizational culture and executive isolation of Chief Executive Officers (CEOs) are analysed on how it is considered by their teams. The same is contextualized through the inputs received through interviews conducted with CEOs and employee surveys. Design/methodology/approach: The qualitative in-depth interviews of five CEOs, and survey across 34 of the 50 employees, were undertaken over the course of two phases of this study. The investigation focused on identifying executive isolation of CEOs and perspectives of employees that can impact the leadership and learning progress of organizations based on work culture, power distance and decision-making; awareness and experience of executive isolation; workplace friendliness and rejection; and management development initiatives to minimize the impact of executive isolation. Qualitative data analysis was conducted using MAXQDA 2022 (Verbi Software, Berlin, Germany), which is a qualitative data analysis software. Findings: The findings highlight and expose the significant gap between understanding and analysing of the factors due to which the CEOs undergo executive isolation. It also extends to providing details related to the lack of awareness of the teams' actions contributing to the CEOs' isolation. It further highlights the fact that the difference of perspectives between the CEOs and teams leads to the organization slowing in its learning activities due to the leaders' own challenges of executive isolation The findings also provide immense need of developing knowledge assets and management development initiatives for learning interventions, to help understand, analyse and mitigate executive isolation, in the interest of the organizational learning and development. Originality/value: Earlier research work have contextualized the executive isolation impact on CEOs ability to be a leader. This study extends it to include the implications of leadership and learning culture on the teams that are affected by organization culture, power distance, decision-making and analysing the gap between the understandings about executive isolation of the CEOs. Eventually, it interprets how CEOs courting the executive isolation impacts the overall developmental culture of the organization. This will help in asserting the serious need of new learning frameworks needed to minimize the impact of CEO-level executive isolation. [ABSTRACT FROM AUTHOR]

Research Question/Issue: This study explores the relationship between the presence of a lead independent director (LID) and firms' internal information environment. LIDs are elected independent members of the board who perform key duties for the independent directors and the board, including reviewing and approving board meeting agendas, chairing non‐executive board meetings, and acting as a liaison between the CEO and other independent directors. We hypothesize that LID presence lowers information barriers between the CEO and the rest of the board members, enabling more rapid information acquisition and integration and enhancing the internal information environment of the firm. Research Findings/Insights: Using a sample of US publicly listed companies from 2001 to 2019, we document that LID presence on the board is positively associated with proxies of internal information quality that reflect better information acquisition and information integration: accuracy and precision of management earnings forecasts, speed of earnings announcement, and absence of material weaknesses in internal controls. These results are robust to alternative model specifications, including entropy balancing, Heckman two‐step correction for self‐selection bias, firm fixed effects, and placebo tests. Further analyses suggest that LIDs with financial expertise and audit committee memberships are more effective in positively influencing internal information quality. We also show that LID presence is positively associated with several proxies of external information quality. Theoretical/Academic Implications: We build on agency theory to argue that LIDs improve internal information quality by reinforcing the information quality benefits of unified leadership while mitigating potential compromises in information quality arising from entrenchment. Similarly, we use arguments emanating from the novel strategic leadership systems theory to posit that a LID appointment facilitates the tasks of the CEO and the board, enhancing the effectiveness of both groups in their respective roles: the CEO in making operating and investment decisions and the board in strengthening oversight while bringing cohesion in their shared role of strategy visioning and implementation. Practitioner/Policy Implications: Our findings suggest that there is scope for shareholders to consider LID appointments as an addition to their firms' corporate governance structures to enhance the internal information environment and decision‐making efficiency. Policymakers can also encourage LID appointments on the board when promoting best practices in corporate governance through regulatory guidelines. [ABSTRACT FROM AUTHOR]

The role played by leaders in the adoption of eco‐innovations (EIs) by small and medium enterprises (SMEs) is crucial, but there is still little evidence regarding the influence of leaders on EIs. Despite the extensive literature on EI, studies that empirically evaluate the association between the role of SME leaders (CEOs, top managers, and board members) on the delimitation of the barriers to EI are lacking. The relationship between combinations of leader personality traits and the adoption of EI from a sensemaking perspective is examined to address this research gap. In addition, fsQCA analysis was applied. The responses of 40 SME leaders revealed that configurations involving barriers and personal traits have led to several solutions in which conscientiousness, openness, and either the presence or negation of neuroticism by SME managers were relevant. Moreover, the offset between financial barriers and the lack of public funding for EIs emerges in all eco‐innovative success solutions. These results show that different combinations of personality traits interact with different EI barriers. Therefore, the obstacles to EI depend on the interpretations of the leader rather than being one‐size‐fits‐all. Based on sensemaking theory, as taken from organizational studies and the literature on microfoundations, these findings enhance our understanding of the influence of individual‐level psychological traits on EI adoption. Furthermore, practical implications are presented for SMEs with the goal of adopting sustainable innovative strategies. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to argue that large executive compensation can be one of the reasons why so many chief executive officers (CEOs) are overconfident. It also discusses the implications of this finding for boards and human resource directors. Design/methodology/approach: The research investigated how overconfidence – an overestimation of ability – affects how hard people work to win an elimination contest. These kinds of contests exist in the workplace where employees strive for a senior position or CEO role. The study involved a two-stage contest with four players. The first stage consists of two semi-finals. The two semi-final winners move on to compete in the second stage, the final. Overconfident players overestimate the impact of effort on their probability of winning at each stage. Each player is deemed the same, aside from their confidence levels. Finally, the study assumes an overconfident player's bias is observable by rivals. Findings: Overconfident individuals can have the highest chance of winning elimination contests compared to more rational rivals. When executive pay is high, and overconfidence is not too extreme, they exert more effort than their rational rivals in the semi-finals. High executive pay, or in this case, prize money, is more appealing to overconfident individuals because they think they are more likely to win the bigger prize money in the final. This can be likened to people's careers. High executive pay incentivises overconfident employees more and they exert more effort early in their careers to achieve this. Originality/value: To the best of the authors' knowledge, this is one of the first studies to measure the impact of overconfidence on elimination contests, providing a new explanation for why overconfident employees often reach CEO positions. This has implications for how HR practitioners should manage overconfident and rational employees, including the effort they deliver to a business. [ABSTRACT FROM AUTHOR]

I evaluate the effect of financial statement audits on the governance practices of nonprofit organizations. Using a regression discontinuity design that exploits revenue-based exemption thresholds, I find that financial audits cause organizations to implement governance mechanisms, such as conflict of interest policies, whistleblower policies, and formal approval of the CEO's compensation by a committee. Consistent with these governance practices curtailing managers' private benefits, I document reductions in nepotism and CEO-to-employee pay ratio. The results are more pronounced for organizations (1) whose audit is overseen by an audit committee, (2) that already have an independent board, and (3) that face high charity-level demand for oversight. Collectively, these findings shed light on how financial audits shape the governance practices of small, less sophisticated organizations like nonprofits in ways that go beyond financial statements' direct use in decision-making and contracting. JEL Classifications: M42; G34; M48; L31. [ABSTRACT FROM AUTHOR]

When determining new equity grants, corporate boards face a tradeoff between the CEO's incentives generated from the grant's duration versus those arising from the convexity of the embedded equity risk. We hypothesize and find that boards lengthen the horizon of new compensation grants in the presence of greater pre-existing compensation sensitivity to stock return volatility (vega). In addition, consistent with our hypothesis, we find stronger results in the presence of greater left-tail risk. Further, employing two exogenous shocks to left-tail risk, we provide evidence consistent with our hypothesis that grant horizons are related to risk incentives. Our analysis of the interaction of these two incentive mechanisms provides new insights on compensation contracting. JEL Classifications: J33; M52. [ABSTRACT FROM AUTHOR]

This study examines how top leader turnover in the public sector affects organizational strategic decision-making processes in the post-succession phase. Survey responses of managers were combined with a novel database on CEO turnover in the U.S. Federal Government. Drawing on threat-rigidity theory, we hypothesize that as CEO turnover is perceived as a threatening event for both managers and CEOs themselves, organizations as a whole respond by becoming more rigid, centralizing strategic decision-making and restricting the flow of information. This has knock-on effects on the quality of strategic decisions and their implementation, with detrimental effects on the delivery of public services. [ABSTRACT FROM AUTHOR]

Understanding chief executive officers (CEOs) is important because of their vast influence on the strategies and performance of organizations. With the growth of family business research, new insights about family firm CEOs have emerged. However, knowledge about family firm CEOs is dispersed across an array of disciplines that take different perspectives. These differences have led to an inconsistent understanding of family firm CEOs, particularly since they can be family or nonfamily members with varying levels of willingness, ability, and capability to select and implement distinctive strategies. To better understand CEOs in family firms, we reviewed 175 articles published between 1984 and 2021 using upper echelons theory to capture the relationships among CEO characteristics, strategic choices, and firm performance. Our integrative review synthesizes findings from entrepreneurship, management, finance, economics, and other disciplines to provide insights and future research directions on CEO characteristics, strategic choices, and firm performance in family firms. [ABSTRACT FROM AUTHOR]

The present research examines how a temporal dimension of the Chief Executive Officer (CEO) fashion style—consistent (vs. variable) fashion—influences stakeholders' perceptions of CEO competence. Based on the temporal aspect of attribution theory, we hypothesize that stakeholders perceive those CEOs who are consistent in their clothing across various occasions as more competent than CEOs who do not portray consistency. We also consider CEO gender a key moderator of the link between fashion consistency and perceived competence. Based on gender stereotypes and relatively unclear rules about women's clothing within professional settings, we hypothesize that the enhancement of perceived competence from a consistent fashion style is mitigated for female CEOs. Furthermore, by applying a zero‐sum belief in time management to CEOs' clothing decisions, we hypothesize that perceived work engagement mediates the "gender" moderation. Three studies, including a survey and two scenario‐based experiments in which we manipulate fashion consistency and CEO gender, largely supported the hypotheses. The results emphasize the importance for CEOs to strategically manage visual cues, like fashion style, focusing on either their consistency or variability when interacting with stakeholders across different occasions. [ABSTRACT FROM AUTHOR]

Technological innovation is critical for high‐tech new ventures (HTNVs), and the position of Chief Technology Officer (CTO) has become increasingly crucial in top management teams (TMTs). Drawing upon the upper echelons theory and the attention‐based view of the firm, we examined a sample of 429 HTNVs in China between 2014 and 2019 to test whether and how appointing a CTO and the CTO's characteristics affect the new ventures' innovation activities. The results show that having a CTO position promotes HTNVs' exploratory innovation activities but does not affect exploitative innovation activities. While a longer CTO tenure positively affects exploratory innovation, it hinders exploitative innovation. In addition, a CEO serving as the CTO in a HTNV has a negative effect on exploitative innovation activities but no effect on exploratory innovation activities. This effect is contingent on the CEO's technological background and whether the CEO owns shares in the HTNV. The findings of this study enrich the literature on the upper echelons theory, the attention‐based view, and entrepreneurship and innovation and provide rare empirical evidence on whether and how appointing a CTO, CTO characteristics, and the interaction of CTO characteristics and CEO characteristics affect HTNVs' innovation activities in emerging markets. [ABSTRACT FROM AUTHOR]

Purpose: Emotions are widely acknowledged decision-making drivers, taking the front seat when managers lack objective information. Existing evidence indicates that negative emotions often lead to the decision to retrench. Contrary to these insights, our research aims to show that negative emotions can sometimes push top managers to withdraw from retrenching marketing activities. By drawing on the affect-as-information approach, this study aims to examine the direct and conditional effects of top managers' negative emotions on small and medium-sized enteprises (SMEs') intention to retrench marketing activities during the recent economic crisis caused by the COVID-19 pandemic. Design/methodology/approach: This study uses a descriptive research design and surveys a sample of 155 chief executive officers from business-to-business (B2B) SMEs in Croatia. The authors empirically test the conceptual framework with hierarchical regression. Findings: Based on the sample of 155 top managers of SMEs operating in B2B industries, negative emotions positively drive marketing retrenchment. However, additional insights reveal that this relationship is conditioned by crisis severity and SMEs' strategic orientations (exploration and exploitation). The relationship between negative emotions and marketing retrenchment weakens for SMEs severely hampered by the crisis and for SMEs following the exploitative orientation. In contrast, this relationship becomes stronger for SMEs whose business customers have been severely hampered and for SMEs following exploratory orientation. Originality/value: This research advances the body of knowledge by demonstrating that, depending on the severity of the crisis and the strategic orientation of the SME, top managers may interpret negative emotions quite differently, which eventually has lasting consequences on marketing retrenchment during crises. Therefore, by focusing on emotional microfoundations and unique crisis- and firm-level contingencies, this study goes beyond existing theoretical discussions that contrast marketing retrenchment vs investment and offers a different understanding of why and when SMEs retrench their marketing activities during crises. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

Research Summary: This study extends recent findings that inventor CEOs increase innovative output in large established firms by examining how their involvement in the innovative process influences the nature of innovations produced. Our theory suggests that inventor CEOs who take a hands‐on approach to innovation lead their firms to engage in more exploitative rather than exploratory innovation. We further posit that this effect is particularly strong for insider inventor CEOs, and especially founders, but weaker for outsiders and when the firm's board has broader industry experience. Using a sample of S&P 1500 firms from 1994 to 2010 and inventor CEOs' engagement in patenting as an indicator of hands‐on involvement, we find considerable support for our predictions. Managerial Summary: CEOs with hands‐on experience innovating can substantially increase innovative output in large established firms. Yet, we show that inventors who remain directly engaged in their firms' innovation activities as CEO can limit their scope to incremental innovations that exploit existing technologies as opposed to more radical innovations that result in novel product or service offerings. These tendencies are stronger for inventors who come to the CEO position from inside the firm, especially founders, but weaker when the firm's board has broader industry experience. Overall, our study reveals an important tradeoff for large firms of having an inventor as CEO, how hands‐on involvement by inventor CEOs may narrow their firms' innovative trajectories, and how or when these tendencies can be mitigated. [ABSTRACT FROM AUTHOR]

Environmental innovation is a key approach for firms wishing to improve their competitiveness, and CEOs have a crucial impact on the environmental innovation of the firms they lead. Based on upper‐echelon theory, this study explores the impact of CEOs' overseas experience, political background, and environmental background on their firms' environmental innovation, as well as the moderating effect of CEO tenure. We selected Chinese A‐share listed manufacturing companies operating between 2014 and 2021 as the research sample and tested our hypotheses using STATA 15.1 software. The results indicate that the political background, overseas experience, and environmental background of a CEO all have a positive impact on firms' environmental innovation. The CEO tenure plays a positive moderating role in the impact of the three types of CEO background experiences on firms' environmental innovation. Further analysis reveals that the promotion effect on firms' environmental innovation of CEO overseas experience and political background is more significant in state‐owned firms, while the promotion effect of environmental background is more significant in nonstate‐owned firms. When compared with small firms, the three background experiences have a more significant impact on environmental innovation in large firms. CEO background experience has a positive impact on both the substantive and strategic environmental innovation of firms. We provide references for the implementation of environmental innovation and the selection of relevant executives. [ABSTRACT FROM AUTHOR]

The ESG paradigm has exerted increasing pressure on firms to adopt environment‐friendly and socially responsible policies. Interestingly, less attention has been paid to the drivers of ESG performance. Therefore, we address this gap by analyzing a sample of Chinese non‐financial firms. First, we examine if CEO power dimensions influence ESG performance. Second, we investigate if board gender diversity (BGD) influences the association between CEO power and ESG performance. Third, we explore if board independence and board gender diversity complement each other by influencing the relationship between CEO power and ESG performance. The study has used a rigorous methodology comprising five statistical estimation techniques and several variable measurements. In addition, we extensively analyze the two‐way and three‐way interactions for moderation analysis. Our unique results indicate that CEO structural and duality powers diminish ESG performance while CEO expert and ownership powers enhance ESG performance. Further, we document that BGD has a positive influence on the association between CEO power and ESG performance. The results also reveal that BGD and BI favorably complement each other by influencing the relationship between CEO power and ESG performance. The further analysis results indicate that an adequate number (or critical mass) of female directors are required on the board along with CEO power to improve ESG performance. We also find that CEO tenure and ownership have an inverted U‐shaped relationship with ESG performance. [ABSTRACT FROM AUTHOR]

This study examines the relationship between chief executive officers' (CEOs) overseas experience and social responsibility (SR) disclosure, as well as how CEOs from reputable universities can moderate this relationship. Using 488 firm‐year observations from firms listed on the Bursa Efek Indonesia (Indonesian Stock Exchange) and data from the Global Reporting Initiative databases from 2010 to 2021, this study finds a significant negative association between foreign‐educated CEOs (CEO overseas experience) and SR disclosure. This study also finds that CEOs from reputable universities can weaken this relationship. The results are robust to endogeneity tests using the coarsened exact match (CEM) and Heckman's two‐stage regressions. Furthermore, overseas experience CEOs have a significantly negative impact on all dimensions of SR disclosure, except for the environmental and product dimensions. Investors may consider CEOs' foreign education as an additional factor in their investment decisions. This study suggests that firms with CEOs with international exposure tend to exhibit lower levels of SR disclosures. This insight can aid investors in evaluating sustainability and ethical performance by aligning their investment portfolios with CSR objectives and preferences. [ABSTRACT FROM AUTHOR]

This study investigated whether local Chief Executive Officers (CEOs) with a strong sense of power foster excessive investment compared with non-local CEOs to explore how the psychological impacts of power shape individual behaviour. This study observed a sample comprising 5460 firms from Chinese listed firms yearly between 2008 and 2020. This study found a strong association between local CEOs and excessive investment. The results of this study remain consistent after a series of robustness tests. Further analyses revealed that both CEO overconfidence and power are important factors shaping excessive investment. In conclusion, these findings revealed that local CEOs foster excessive investment owing to the psychological effects of sense of power. This study provides insights into the influence of the CEO's local status on corporate decision-making, which can be beneficial for policymakers, investors, and other stakeholders. [ABSTRACT FROM AUTHOR]

Examining the staggered adoption of universal demand (UD) laws as an exogenous shock to shareholder litigation risk, we show that firms have lower stock returns following that adoption in a difference‐in‐differences (DID) design and Fama and MacBeth (1973) regression. Sorting stocks into UD laws portfolios, we show that firms adopting UD laws earn lower risk‐adjusted returns than those who do not. Further, the relation between UD laws and returns is more pronounced when firms face financial constraints, CEOs engage in high risk taking, or takeover protection is low. [ABSTRACT FROM AUTHOR]

Relations between REIT CEO compensation, firm stock performance and risk, after FASB accounting changes and additional SEC compensation disclosure requirements in 2006, are examined. Total compensation becomes more weighted to bonus payments and stock grants and away from options and salary. The majority of REIT CEO compensation comes from bonus payments and stock grants. REIT CEO compensation is found to be positively correlated with lagged firm stock performance, but not lagged firm risk measures. A new metric related to the REIT dividend requirement, dividends paid to CEOs from share ownership, is positively related to CEO total compensation, and the positive relation is driven by a strong association between cash dividends to CEOs and their equity-based compensation. These findings suggest that REIT CEOs trade-off certainty in cash compensation for equity-based wealth and related cash flows. Most important, our results suggest that REIT CEOs are paid for performance and are less likely to earn windfalls that have been associated with the use of options and mis-priced firm risk in non-REIT firms. [ABSTRACT FROM AUTHOR]

Meghan Anzelc, Ph.D., is the founder and CEO of Three Arc Advisory. Christina Fernandes‐D'Souza is the firm's vice president of Data Science. In this article they discuss what board directors should do to govern their own use of AI in the boardroom; the current state of AI offerings; areas of higher and lower risk use and how to know if AI is the wrong solution. [ABSTRACT FROM AUTHOR]

Global economies are increasingly focusing on digital technology to break through the conventional innovation development pattern. This study examines the degree to which CEOs with digital technology backgrounds affect corporate innovation. In a broader sense, it investigates the significance of digital technology in the innovation transformation of global economies. We find that CEOs with digital technology backgrounds significantly enhance corporate innovation performance. Mechanistic tests indicate that CEOs with digital technology backgrounds promote corporate innovation performance through a stronger willingness for digital transformation, higher level of internal control management and focus on fostering a stronger culture of collaboration compared to CEOs without digital technology backgrounds. Additionally, CEOs with digital technology backgrounds are better at promoting corporate innovation within state-owned enterprises and enterprises that do not receive industrial policy support. Further analysis suggests that CEOs have a greater impact on corporate innovation when the macroeconomic environment is compatible with their personal traits. Therefore, for companies competing in the field of digital technology, talent construction is vital to gaining a competitive advantage. [ABSTRACT FROM AUTHOR]

Fuzzy front-end is the research frontier of manufacturing industry. This study investigates the relationship between market-oriented FFE activities and manufacturing startup growth performance by adopting an open innovative ancient Chinese Taoism Yin-Yang approach under this post-pandemic circumstance. This study also examines the moderating behavioral effect of Chinese Zen-originated CEO mindfulness between market-oriented FFE activities and manufacturing startup growth performance. Data for this study were gathered from 343 Chinese manufacturing startups' CEOs across different manufacturing industries, including both high-tech and conventional manufacturing industries. The collected data were analyzed by using structural equation modeling and Bootstrap method. The quantitative analysis results show that most market-oriented FFE activities have positive effects on manufacturing startup growth performance and the Chinese Zen-originated CEO mindfulness positively moderates the relationship between most FFE activities and startup growth performance. [ABSTRACT FROM AUTHOR]

This paper investigates the resources and capabilities that determine firm-level adjustments after a sudden unexpected closure of a major export market. We focus on the effects of the 2014 Russian embargo on Western food exporters using the example of Estonian firms. The paper applies a novel multimethod approach consisting of Study I quantifying the embargo effect on the trade diversion of firms that had exported embargoed goods to Russia, and Study II conducting a multiple case study into three dairy exporters highly affected by the embargo. Study I employs a difference-in-difference model with matched exporters of embargoed goods as treatment. Study II builds on extensive document analysis that serves as input for interviews with the CEOs of the sample dairy firms. We find that pre-shock productivity is on average a good predictor of post-shock firm trade diversion (Study I), however, we specify that the key firm-level resources and capabilities necessary for successful post-shock adjustments might not be reflected in the standard quantitative productivity level measures (Study II). We conclude that key firm-level resources and capabilities for embargo-resilience are the quality of exporting experience, competitive product-market matching, absorptive capacity, and managerial vision and empowerment. [ABSTRACT FROM AUTHOR]

The extent and mechanisms through which religion intertwines with decision-making processes in family firms remain inadequately understood. Family firm owners, driven by their commitment to ethical business practices and the safeguarding of their socioemotional wealth, actively seek cues to inform their decision-making processes. This research demonstrates that, among these guiding cues, top-level executives' perceived religiosity emerges as a relevant factor. Building upon the socioemotional wealth perspective and conducting a longitudinal analysis based on listed family firms between 2009 and 2018, our findings reveal a positive association between family voting rights and the presence of board members perceived to be religious. Furthermore, this relationship is less pronounced if family firms operate in industries with high research and development intensity. Our study confirms that boards with high shares of religiously perceived directors are positively associated with the appointment of chief executive officers perceived to be religious during succession events. We thereby present a unique perspective that acknowledges perceived religiosity as a micro-level constituent shaping board membership and successor selection. This investigation captures the intricate interplay between religion and family firms under a socioemotional wealth umbrella, offering important insights to the family business ethics discourse. Our research also offers practical implications for board and leadership diversity management in family firms. [ABSTRACT FROM AUTHOR]

We examine how social diversity and inclusiveness on corporate boards affect corporate performance and monitoring in Sri Lanka, a country subject to decades of polarization, civil war, and even genocide. Barely more than a decade after the civil war, we find that board social diversity on the basis of ethnicity, religion, language, gender, and nationality of the board members is positively related to corporate performance, both in terms of stock market performance and accounting returns, and to corporate financial stability. The main positive effects of social diversity derive from ethno-linguistic inclusiveness. The results are confirmed by an instrumental variable approach that addresses endogeneity issues. We find no evidence that inter-personal and moral conflicts or communication problems among board members negatively affect firm performance. [ABSTRACT FROM AUTHOR]

The succession mode of interim CEO is highly uncertain. The smooth transition function of interim CEO is particularly important in the process of enterprise reform. We divide interim CEOs into potential successors and transition successors. Then we empirically analyze the heterogeneous impact and mechanism of interim CEOs on firm performance. The results show that compared with transition CEO, potential CEO has less negative impact on corporate performance. Interim CEO has a negative impact on enterprise performance by reducing agency efficiency. The mechanism analysis of this paper are as follows. For the potential CEO, strong incentive constraints can effectively mitigate the negative impact of the succession on corporate performance. For a transitional CEO, superior personal capabilities coupled with an effective oversight mechanism represent more optimal solutions. In today's corporate landscape, the frequencies of executive changes and interim successions are on the rise annually. Our research is tailored to aid enterprises in navigating these transitions seamlessly and in expediting their recovery processes. [ABSTRACT FROM AUTHOR]

According to State Law 12/07, the governor has very important powers. He represents the state on one hand and the country on the other. The governor is considered the chief executive of the province and the sole direct representative of each minister in the context of representing the state. He ensures the implementation of laws and regulations and the respect for state symbols and emblems while performing administrative tasks to maintain order, security, and public tranquility. [ABSTRACT FROM AUTHOR]