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The moderating effect of board size on the relationship of CEO power and financial firm performance in the United Kingdom

Moekotte, M. (2021) The moderating effect of board size on the relationship of CEO power and financial firm performance in the United Kingdom.

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Abstract:In this study, the moderating effect of board size on the relationship of CEO Power on the financial performance of publicy-listed firms in the United Kingdom is investigated. In this study CEO Power is measured with five individual CEO Power variables. The power of a CEO is measured by the compensation, ownership, founder status, duality, and tenure of the CEO with regards to the firm. These variables are reduced to two CEO Power indexes with the usage of principal component analysis. Based on a sample of 142 UK publicy-listed firms for a period of 2013-2018 an OLS regression analysis is performed. According to the literature, the size of the board of directors do have a significant effect on CEO Power and the financial performance of firms. However, in this study there are no significant results found with regards to the moderating effect of board size on the relationship of CEO power and financial firm performance. However, there is little evidence found in this study to support the claim that CEO power influences the financial performance of firms. This evidence is only found when financial firm performance is measured with Tobins’Q.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/85986
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