Search

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]