Corporate governance and generalist CEOs: evidence from board size

被引:12
|
作者
Chatjuthamard, Pattanaporn [1 ]
Ongsakul, Viput [2 ,3 ]
Jiraporn, Pornsit [4 ]
Uyar, Ali [5 ]
机构
[1] Chulalongkorn Univ, Sasin Sch Management, Ctr Excellence Management Res Corp Governance & B, Bangkok, Thailand
[2] Natl Inst Dev Adm NIDA, NIDA Business Sch, Bangkok, Thailand
[3] Secur & Exchange Commiss Thailand, Bangkok, Thailand
[4] Penn State Univ, Great Valley Sch Grad Profess Studies, Malvern, PA USA
[5] Excelia Business Sch, CERIIM, La Rochelle, France
关键词
CEO general managerial ability; Board size; Corporate governance; Generalist CEOs; Specialist CEOs; CEO general managerial skills; Board of directors; FIRM PERFORMANCE EVIDENCE; FINANCIAL PERFORMANCE; DIRECTORS; ABILITY; IMPACT; INVESTMENT; EXPERIENCE; DIVERSITY; COMPANIES;
D O I
10.1108/CG-02-2021-0058
中图分类号
F [经济];
学科分类号
02 ;
摘要
Purpose The purpose of this study is to contribute to the debate in the literature about generalist CEOs by exploring the effect of board governance on CEO general managerial ability, focusing on one of the most crucial aspects of the board of directors, board size. Prior research shows that smaller boards constitute a more effective governance mechanism and therefore are expected to reduce agency costs. Design/methodology/approach The authors estimate the effect of board size on CEO general managerial ability, using a fixed-effects regression analysis, propensity score matching, as well as an instrumental-variable analysis. These techniques mitigate endogeneity greatly and make the results much more likely to show causality. Findings The results show that firms with smaller board size are more likely to hire generalist CEOs. Specifically, a decline in board size by one standard deviation raises CEO general managerial ability by 15.62%. A lack of diverse experiences in a small board with fewer directors makes it more necessary to hire a CEO with a broad range of professional experiences. Furthermore, the agency costs associated with generalist CEOs are greatly diminished in firms with a smaller board. Hence, firms with a smaller board are more inclined to hire generalist CEOs. Originality/value Although prior research has explored the effects of board size on various corporate outcomes, strategies and policies, this study is the first to investigate the effect of board size on CEO general managerial ability. This study contributes to the literature both in corporate governance and on CEO general managerial ability.
引用
收藏
页码:148 / 158
页数:11
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