Характеристики CEO и финансовая результативность компании

Performance of the companies is highly dependent on the effective corporate governance system. This conclusion has been made by numerous researchers while analyzing the role of corporate governance. Main results of the studies indicate that corporate governance mechanisms can significantly reduce agency problem and improve firm efficiency.
Company’s reputation is critical corporate asset that is crucial for achieving competitive success [Gray & Balmer, 1998]. CEO of the company directly influences firm’s reputation by setting and fulfilling its strategic goals and together with top management undertaking steps for development. However, decisions of CEO can both improve reputation or ruin it.
Personal characteristics and the experiences of CEO affect company’s vision and the development of corporate reputation [Balmer, 2001]. Hence, new CEO is able to affect greatly the future prospects of the company and outcomes of its performance.
Precise attention has been paid in recent times to the analysis of Board of Directors’ role in company performance. CEO’s influence has been studied as well; however, the pool of studies devoted to this issue is smaller. Nevertheless, results of these studies could bring important implications for the companies since aforementioned representatives are chosen based on different internal characteristics, previous experience and other significant features. Hence, influence of each characteristic should be carefully analyzed and later thoroughly evaluated by the company.
‘Upper-echelon’ theory developed by Hambrick and Mason in 1984 suggests that top managers influence significantly organizational outcomes. It happens primarily because executives’ characteristics such as gender, age, values, experience, background and other influence the way they interpret situations and make choices. Therefore, organizational outcomes could be partially predicted by managerial background characteristics.
The characteristics of executives of Russian companies and their influence on firm’s performance have been studied by several academics. In previous researches among the following traits were analyzed most often: gender, age, tenure and experience. However, the results of the studies are sometimes controversial and mostly outdated. Further, some characteristics of Russian CEOs were investigated deeper based on the research of Russian companies while others did not receive proper attention, such as political connections.
As a result, the research gap was identified and it was determined that a new research based on present data is required where particular characteristics of CEOs will be investigated with precise attention. The following research questions were formulated: does a relationship between CEO characteristics and financial performance of the company exist? Which CEO characteristics matter most for company financial performance?
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The goal of the study is to identify the relationship between CEO characteristics and company financial performance.
In order to achieve the goal of the study and answer the research questions the following objectives were formulated:
• To analyze existing foreign and Russian literature on the topic of relationship between CEO characteristics and companies’ financial performance;
• To formulate hypothesis for the empirical study based on the literature review;
• To conduct empirical study and test developed hypothesis;
• To make conclusions and formulate recommendations based on the results of the study.
The methodology of the study is based on the regression analysis where the dependent variables include such accounting-based measures as ROA, ROE, EPS and DPS and independent variables are represented by different characteristics of CEOs of Russian public companies. Four models are built in order to establish relationships and provide implications.
In this paper, both theoretical and practical contributions are expected to be made. The main theoretical value of this research is to find evidence whether relationship between specific characteristics of Russian CEOs and financial performance of the companies they manage exist and establish direction of the relationships. Practical implications are formulated in the form of guidelines that are expected to help stakeholders choose appropriate CEO in order to satisfy objectives of the company.
Structure of this paper include introduction, two main chapters, conclusion and appendices. The first chapter is theoretical one and includes analysis of corporate governance theories, Russian practices of corporate governance, the role and functions of CEO and literature review of studies that investigate relationship between CEO characteristics and firm financial performance. Based on the literature review hypothesis are formulated in the first chapter.
The second chapter is devoted to the empirical study that is based on the econometric regression model helping to identify relationships between CEO characteristics and company financial performance. The results of the empirical study are interpreted and translated into practical recommendations for companies’ executives and board members. In the end of the chapter findings and discussions, managerial implications and research limitations are formulated.