Is CEO Human Capital Related to Firm Performance?

Hutchinson, Marion

doi:10.2139/ssrn.2380510

Cited by 3 publications

(2 citation statements)

References 53 publications

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“…As regards this, decisions made by the top management were infl uenced by the owners. Given that general and specifi c human capital is of vital importance for the success of the company, CEOs with a high level of human capital are less likely to be replaced (Crook et al, 2011;Hutchinson & Russell, 2013). Consequently, if the new owners are not familiar with the business model of the reorganized company, they will probably be willing to keep the existing top managers with a high level of human capital and use other means of control to infl uence the choice of top management and provide them with incentives to improve the overall company's performance, Evans et al (2014).…”

Section: Modelmentioning

confidence: 99%

The analysis of the effects of financial distress on the top management in the Republic of Serbia

Rađen¹

2015

Eur J Appl Econ

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This study aims to examine the effects of financial distress on top management structures, as well as to identify the factors affecting managerial change in the companies that adopted the reorganization plan during bankruptcy proceedings in the Republic of Serbia for the period 2009-2014. Out of 39 companies that adopted the reorganization plan, the top management change was observed in 21 companies after the bankruptcy filing year, or within two years following the reorganization plan adoption. Research results indicate a strong negative correlation between the company's liquidity and the probability of change in top management structures, with the impact of other observed factors not being statistically significant.

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Section: Modelmentioning

confidence: 99%

The analysis of the effects of financial distress on the top management in the Republic of Serbia

Rađen¹

2015

Eur J Appl Econ

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“…Existing studies on the strategic consequences of executive turnover events reach a consistent conclusion that executive turnover brings strategic changes to companies because there are cognitive differences between the successor and departing executives due to their diverse experiences and backgrounds (Zhang & Rajagopalan, 2010). Executive turnover is likely to be a disruptive event, leading to organisational instability, increased tension, and lower morale and productivity (Hutchinson, 2014). Furthermore, it may also lead to a sudden increase in the turnover rate of other employees, especially when the enterprise is facing acquisition or restructuring (G. Cummings & Estabrooks, 2003).…”

Section: Introductionmentioning

confidence: 99%

Impact of top executive turnover on firms’ R&D investment: evidence from China

et al. 2020

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Though top executive turnover's economic consequence is highlighted in earlier studies, its link with innovation behaviour has remained relatively underexplored. This study aims to fill this gap through investigating whether, and if so, how, top executive turnover event influences firms' R&D investment. Based on a sample of 2,810 A-share listed companies in China for the period 2008-2016, our results suggest that top executive turnover is negatively related to enterprises' R&D investment. This is mainly because top executive turnover increases the departure rate of R&D personnel, which worsens enterprises' internal R&D environment. The findings also indicate that the negative effect of top executive turnover on R&D investment is accentuated for family enterprises and non-stateowned corporations. Our results have implications for the literature on top executive turnover and enterprises' innovation behaviour and can inform practice, particularly with respect to the selection of top management team members.

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The Relationship Between Chief Risk Officer Expertise, ERM Quality, and Firm Performance

Bailey

2019

Journal of Accounting, Auditing & Finance

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Financial volatility and the most recent financial crisis turned the spotlight on enterprise risk management (ERM), yet, high-quality ERM is difficult to define and in many ways, poorly understood. Furthermore, little is known about the individuals occupying key risk management positions within the firm and their relationship to ERM system quality and outcomes. Although the resource-based theory of the firm suggests that expertise in key risk management positions will be beneficial, institutional theories of corporate governance suggest that these positions might be created simply as “window dressing” in response to pressure from regulators and investors. This study examines expertise in the chief risk officer (CRO) role. I examine seven individual expertise areas, as well as broad-based expertise measures. Results show that supervisory and industry expertise of the CRO, as well as an MBA degree and internal promotion are associated with higher ERM quality. Risk and actuarial expertise are associated with higher levels of return on assets (ROA), whereas financial expertise, supervisory expertise, and an MBA degree are associated with higher levels of Tobin’s Q. Broad-based CRO expertise measures are also associated with ERM quality and firm value. Additional results show that expertise in the CRO role was particularly important during the financial crisis. Findings should inform investors and regulators of the importance of the individuals occupying key risk management roles within the firm and help further understanding of the determinants and benefits of high-quality ERM.

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Is CEO Human Capital Related to Firm Performance?

Cited by 3 publications

References 53 publications

The analysis of the effects of financial distress on the top management in the Republic of Serbia

The analysis of the effects of financial distress on the top management in the Republic of Serbia

Impact of top executive turnover on firms’ R&D investment: evidence from China

The Relationship Between Chief Risk Officer Expertise, ERM Quality, and Firm Performance

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