In the combined leadership structure the CEO of the firm also works as the chairman of the board. In the split structure on the other hand the powers and the responsibilities of CEO and that of chairman of the board are separated (Ponnu, 2008). The Boards of Directors are expected to be more independent and efficient in fulfilling their monitoring duties when the CEO is not the chairman of the board (Osma, 2006). The agency theory argues that CEO dominance can lead to opportunistic behaviour which can decrease shareholder wealth. Al-Harkan (2005) reports that the importance of separating the responsibilities of the chairman and the CEO will help companies achieve an effective corporate governance system.
CEO: The highest ranking executive in a company whose main responsibilities are set by the organization's board of directors or other authority, depending on the organization's legal structure1, include developing and implementing high-level strategies, making major corporate decisions, managing the overall operations and resources of a company, and acting as the main point of communication between the board of directors and the corporate operations2. The CEO will often have a position on the board, and in some cases is even the chair1.The role of the CEO will vary from one company to another depending on its size and organization. In smaller companies, the CEO will often have a much more hands-on role in the company, making a lot of the business
These attitudes came out in the manner that he conducted business. His various acquisitions demonstrated a will to succeed to matter the cause or consequence. Consequently, if the CEO is demonstrating appropriate behaviors in the company it would be quite difficult of other managers to to try and change that behavior. However his managers could have taken a collective stance in assuming the principled moral development role and convinced him to turn on a ethically path. An ethical leader is fair and just, encourages team building and honesty.
Networking is therefore an important factor within the culture of S&P. Female directors can contribute to the appointment of female CEO’s, it does not increases the chances of a female being appointed as CEO. The decision of appointing a new CEO depends on, suitability and the ability of the candidate. It is plausible, that female directors have different interpretations than male directors towards appointing a new
More specifically, it is assumed that the main goal of shareholders is to maximise the value of their investment in the firm, while the CEO’s goal is to keep their job and be well remunerated. Regarding their risk profile, the assumption at the basis of the standard agency perspective is that shareholders’ are risk-neutral because they can diversify their overall investment across many firms, while managers and CEOs are risk-adverse because they can only put their effort into one job. Managers and CEOs are also assumed to prefer short-term gains derived from efficiency-seeking strategies, which might dampen long-term returns. Under this view, then, shareholders should promote corporate governance practices that incentivize managers to maximize the value of their investment (Baker et al., 1988 and Agrawal and Knoeber, 1996). According to the standard agency theory view, such corporate governance practices should ultimately increase R&D intensity
He mentioned that just individuals have responsibility and a corporation is an artificial person and so it has artificial responsibilities, however the similar situation cannot be obtained for whole business. He says that, firstly, we should ask what it refers for whom to examine the doctrine of social responsibility of business. He believes that a corporate executive is an employee of the business in a private property sys¬tem and his employers are his re¬sponsibility and says “That responsi¬bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con¬forming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.” The primary responsibility of corporate executive is as an agent for owners of corporation or individuals who constitute charity
CEO’s dominance refers to the power of the CEO to impose his/her overconfidence views or attitudes into the acquisition decision (Brown and Sarma, 2007). Using M&A activity of Australian company between 1994-2002 as sample, Brown and Sarma (2007) find out that the effect of CEO dominance is as significant as that of CEO overconfidence in the acquisition decision. Jensen and Zajac (2004) use CEO duality and relative tenure power to measure the power of CEO and its relationship with M&A, and argue that CEO dominance is negatively related to the shareholder return after the M&A. Hambrick and Daveni (1992) propose a measurement for the CEO’s dominance that using the CEO’s remuneration divided by that of other officers, and they argue that compared with the matching group, the proportion of CEO’s payment is significantly higher for bankrupt firms. Fast et al (2011) investigates the relationship between manager’s power and confidence, and find out that the power of CEOs lead them to overestimate their ability and
They are ultimately in charge of a company’s success or failure while in the position as CEO. Their goal is to increase the value of the company. One of three methods generally determines a CEOs compensation; those methods are by a board that works within the same company, by an external analyst, or in direct relation to performance. According to Lansing and Knoedgen (2007), CEO compensation that is tied to a board’s decision can be biased to be higher than average, because the board members are usually current or former CEOs and would like to maintain the opportunity for the CEO to be a future business partner if
The question of whether CEO in the family-owned company plays such a crucial role in the case of employee satisfaction has been considered for a long time. Hence, for a master’s thesis has been chosen such theme: An investigation on factors affecting satisfaction of employees with special reference to family-owned company - Danos Valuations LLC. The master thesis paper was based on the theoretical background of the research. Family firms - from small local shops and millions of small and medium-sized enterprises (which are the backbone for majority of economies) to multinational companies-giants such as Swatch, Samsung and the BMW, - have always played an important role in stimulating economic growth. Despite the fact that in the second half
The CEO of the organisation is responsible for setting the overall corporate strategy. The primary objective of corporate strategy is to focus primarily on profitability. In an organisation, corporate strategy should be developed before developing strategic marketing. Corporate strategy includes: - Creating an organizational structure - Reduction of debt to improve the balance sheet of organisation - Diversification of product - Service line for increasing profits - To decrease the dependence on one