CEO Power, Equity Incentives, and Bank Risk Taking

Victoravich, Lisa; Buslepp, William L.; Xu, Tracy; Grove, Hugh

doi:10.2139/ssrn.1909547

Cited by 20 publications

(15 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Daily and Schwenk (1996) opined that a manager may be promoted as a result of insider dominance. Victoravich et al (2011) used the proportion of insider directors on the corporate board as an indicator to reduce the CEO power. A finding from data analysis indicates that specific risks reduce with the CEO power.…”

Section: Ceo Originmentioning

confidence: 99%

CEO characteristics and firm performance: focus on origin, education and ownership

Saidu

2019

J Glob Entrepr Res

View full text Add to dashboard Cite

This study examines the impact of the chief executive officer's (CEO) ownership, education and origin on firm performance. The study uses balanced panel data for 6 years from 2011 to 2016 to run ordinary least square regression. Three variables that include the CEO origin, education and ownership are investigated in relation to firm performance. These characteristics are some of the basic CEO characteristics that are rarely considered by prior studies. The study uses a sample from firms in the financial sector listed on the Nigerian Stock Exchange from 2011 to 2016. The findings indicate that CEO education improves profitability. Similarly, stock performance gets improved when the CEO has prior experience of the firm before being appointed as the chief executive officer. The findings will be useful to shareholders in making an informed decision in selecting the right CEO to manage the firm. Further studies need to consider not only the CEO ownership, but also whether the interest in ownership makes them more powerful.

show abstract

Section: Ceo Originmentioning

confidence: 99%

CEO characteristics and firm performance: focus on origin, education and ownership

Saidu

2019

J Glob Entrepr Res

View full text Add to dashboard Cite

show abstract

“…Following Victoravich et al (2011), we chose the following bank risk variables: total risk, measured as the standard deviation of the stock returns of the banks, and systematic risk, which was the coefficient β 1 of the following regression: where R m is the M.S.C.I. stock index for the European Region, and Interest is the three month LIBOR.…”

Section: Conceptual Model Factors and Variablesmentioning

confidence: 99%

“…Iannotta, Nocera, and Sironi (2007) performed an integrated analysis considering governance, specifically ownership structure, risk and performance. Previous studies in this field (e.g., Pathan, 2009;Victoravich, Grove, Xu, & Bulepp, 2011) have focused on US financial institutions, where shareholder dispersion is the paradigm and banks play a less central role in the financial system than in, for example, continental European countries. As Maurović and Hasić (2013) note, agency problems in Anglo-Saxon and continental legal systems also differ.…”

Section: Introductionmentioning

confidence: 99%

The influence of corporate governance on bank risk during a financial crisis

Felício

Rodrigues²,

Grove

et al. 2018

Economic Research-Ekonomska Istraživanja

Self Cite

View full text Add to dashboard Cite

Using agency theory, we explore the relationship between corporate governance mechanisms and bank risk. We employ panel data analysis to study the 97 largest European listed banks between 2006 and 2010, thereby covering the most recent international financial crisis. The results show that corporate governance mechanisms influence bank risk. During the financial crisis, different governance mechanisms can minimise or accentuate the agency conflict between shareholders and managers. In our model, bank size and G.D.P. per capita also exert a considerable influence.

show abstract

“…For example, Pathan (2009) finds that CEO power negatively affects risk taking in banks. Victoravich, Buslepp, Xu, and Grove (2011) suggest that powerful CEOs influence board decision making to their own benefit and tend to reduce firm risk. Gormley and Matsa (2016) argue that managerial risk aversion and career concerns lead managers and CEOs to reduce risk when they are protected from hostile takeovers.…”

mentioning

confidence: 99%

CEO power and corporate risk: The impact of market competition and corporate governance

Sheikh

2019

Corporate Governance

View full text Add to dashboard Cite

Research Question/Issue Although there is no unified theory that can explain the relationship between CEO power and corporate risk, the empirical evidence generally finds a positive association. This study argues that market competition and corporate governance play critical roles in influencing this relationship. Research Findings/Insights Using a large panel of nonfinancial U.S. corporations for the period 1992–2015, I find that CEO power is positively associated with total and idiosyncratic measures of risk. However, this positive association remains significant only when market competition is high or corporate governance is strong. Theoretical/Academic Implications The research design of this study combines the predictions of agency theory, the behavioral agency model, and prospect theory to further our understanding of the relationship between CEO power and corporate risk, including consideration of how competition and corporate governance influence this relationship. Practitioner/Policy Implications The empirical evidence presented in this study can help boards to more accurately gauge when CEO power is most beneficial in terms of optimal levels of corporate risk and to better understand the relationship between power and risk. The results suggest that boards should grant more power to their CEOs when their firms operate in high‐competition markets or have strong corporate governance in place.

show abstract

CEO Power, Equity Incentives, and Bank Risk Taking

Cited by 20 publications

References 26 publications

CEO characteristics and firm performance: focus on origin, education and ownership

CEO characteristics and firm performance: focus on origin, education and ownership

The influence of corporate governance on bank risk during a financial crisis

CEO power and corporate risk: The impact of market competition and corporate governance

Contact Info

Product

Resources

About