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CEO board membership: implications for firm value

Author

Listed:
  • Michelle Li
  • Helen Roberts

Abstract

Purpose - This paper aims to examine the relation between CEO board membership and firm performance. Design/methodology/approach - This paper investigates the relationship between firm performance and CEO board membership, applying two-stage least squares, propensity score matching and correcting for self-selection bias across a unique sample of publicly listed New Zealand firms that demonstrate a definitive variation in CEO board membership. Findings - This study finds that CEO board membership has a positive impact on firm performance, and these benefits are greater for more complex firms. Research limitations/implications - Firms with CEOs independent of the board are associated with lower firm performance. The results are consistent with CEO board members providing an important information transfer mechanism to the board, resulting in an increase in average firm performance. This benefit is greater for larger firms with more business segments. Originality/value - The paper tests for the impact of CEO board membership using a data set that demonstrates a definitive variation in CEO board membership.

Suggested Citation

  • Michelle Li & Helen Roberts, 2018. "CEO board membership: implications for firm value," Pacific Accounting Review, Emerald Group Publishing Limited, vol. 30(3), pages 352-370, July.
    • Handle: RePEc:eme:parpps:par-05-2017-0037
    DOI: 10.1108/PAR-05-2017-0037
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    More about this item

    Keywords

    Firm performance; Corporate governance; CEO board membership; G34; G38;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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