The impact of CEO power on the relationship between board independence and financial performance

نوع المستند : تجاریة کل ما یتعلق بالعلوم التجاریة

المؤلفون

1 كليه التجاره ، قسم المحاسبه ، اللغه الانجليزيه

2 قسم المحاسبة ''، كلية التجارة، جامعة الزقازيق، مصر

3 قسم المحاسبة، کلية التجارة، جامعة الزقازيق، مصر

المستخلص

ABSTRACT

The current study aimed to examine the impact of CEO power on the relationship between board independence and financial performance within Egyptian-listed companies. To achieve this goal, the researcher built a combined index to measure CEO power, which consists of three mechanisms: 1) CEO tenure. 2) CEO duality; and 3) CEO ownership of the company's shares. In order to test the study’s hypotheses, the researcher relied on a sample of 135 companies (945 observations) listed on the stock exchange and belonging to 15 economic sectors in the period from 2015 to 2021. After taking into account the potential effects of firm size, board size, leverage, asset turnover ratio, and institutional ownership on the financial performance of Egyptian listed companies, Using the multiple linear regression model, the researcher concluded that there is a significant positive relationship between board independence and financial performance (ROA, ROE, EPS) and a negative relationship with Tobin's Q. Regarding the impact of the three items that make up CEO power, the results of the study showed a positive relationship between CEO duality and financial performance (ROA, ROE, and EPS) and a negative relationship with Tobin’s Q. There is a positive relationship between CEO tenure and financial performance (ROA, ROE, and EPS), as well as a negative relationship with Tobin's Q. There is a positive relationship between CEO ownership and financial performance (ROE and Tobin's Q), and a negative relationship between ROA and EPS.

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