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What do CEOs do?

Bandiera, Oriana, Guiso, Luigi, Prat, Andrea and Sadun, Raffaella (2011) What do CEOs do? HBS Working Paper , 11-081. Harvard Business School, Boston, MA, USA.

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Abstract

We develop a methodology to collect and analyze data on CEOs' time use. The idea — sketched out in a simple theoretical set-up — is that CEO time is a scarce resource and its allocation can help us identify the firm's priorities as well as the presence of governance issues. We follow 94 CEOs of top-600 Italian firms over a pre-specified week and record the time devoted each day to different work activities. We focus on the distinction between time spent with insiders (employees of the firm) and outsiders (people not employed by the firm). Individual CEOs differ systematically in how much time they spend at work and in how much time they devote to insiders vs. outsiders. We analyze the correlation between time use, managerial effort, quality of governance and firm performance, and interpret the empirical findings within two versions of our model, one with effective and one with imperfect corporate governance. The patterns we observe are consistent with the hypothesis that time spent with outsiders is on average less beneficial to the firm and more beneficial to the CEO and that the CEO spends more time with outsiders when governance is poor.

Item Type: Monograph (Working Paper)
Official URL: http://hbswk.hbs.edu/item/6662.html
Additional Information: © 2011 The Authors
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Journal of Economic Literature Classification System: J - Labor and Demographic Economics > J0 - General
M - Business Administration and Business Economics; Marketing; Accounting > M0 - General
Sets: Departments > Economics
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 11-081
Date Deposited: 15 Apr 2011 15:46
URL: http://eprints.lse.ac.uk/35448/

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