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Powerful CEOs and their impact on corporate performance

Adams, Renee B., Almeida, Heitor and Ferreira, Daniel (2005) Powerful CEOs and their impact on corporate performance. Review of Financial Studies, 18 (4). pp. 1403-1432. ISSN 0893-9454

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Abstract

Executives can only impact firm outcomes if they have influence over crucial decisions. On the basis of this idea, we develop and test the hypothesis that firms whose CEOs have more decision-making power should experience more variability in performance. Focusing primarily on the power the CEO has over the board and other top executives as a consequence of his formal position and titles, status as a founder, and status as the board’s sole insider, we find that stock returns are more variable for firms run by powerful CEOs. Our findings suggest that the interaction between executive characteristics and organizational variables has important consequences for firm performance.

Item Type: Article
Official URL: http://rfs.oxfordjournals.org/
Additional Information: © 2005 The authors
Library of Congress subject classification: H Social Sciences > HG Finance
Journal of Economic Literature Classification System: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales
Sets: Departments > Finance
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 16 Apr 2012 13:42
URL: http://eprints.lse.ac.uk/43127/

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