The Impact of CEOs’ Personal Traits on Organisational Performance: Evidence from Faith-Based Charity Organisations

Abstract

This study examines whether and how a CEO’s personal traits (gender, altruism, age, and founder) influence organizational performance. Building upon upper echelons theory, this study develops a conceptual framework that gives explicit recognition to how the institutional environment surrounding the CEOs shapes their characteristics, which, in turn, are reflected in the different organizational strategies and performance. This study moves beyond the existing focus on for-profit corporations and conducts the empirical analysis on a novel, hand-collected, longitudinal dataset of 1342 firm-year observations of 128 faith-based charity organizations operating in a major developing, Muslim-majority country in the period 1996–2019. This study reveals that those faith-based charity organizations led by CEOs with specific personal traits (woman, altruistic, young, and founder) exhibit better organizational performance. Importantly, CEOs’ personal traits, however, do not have a uniform, systematic effect; their effect is generally strengthened when the CEO is also the founder of the faith-based charity organization, given the greater latitude of managerial discretion that a CEO has in managing the organization. Our findings have important implications for individual charity organizations; their board of directors; and their stakeholders, in particular the communities they serve, as well as the whole society where they operate.

Cultural Influence on Corporate Sustainability: A Board of Directors Perspective

“…It is considered that institutional theory is established as a dynamic component that includes factors that influence the interaction between different actors (Athar et al 2023). It is possible to observe that the relationship between organizational innovation, organi-zational learning, the sustainability innovation performance, and the board directors is based on the behavior that firms assume, the government structure, and the strategies that ensure success in the long-term context in which they operate (Melis and Nawaz 2023;Jouber 2023).…”