This dissertation includes two related chapters that investigate corporate governance. In the first chapter, we examine the effectiveness of board monitoring on CEOs. It is widely believed that outsider boards are better monitors. In fact, regulations now require that the board of directors of publicly traded firms be composed of a majority of independent directors (or outsiders). However, this paper documents that an insider-dominated board can monitor the CEO just as well as an outsider board can when the firm's CEO is hired from outside. The results suggest that what matters is not so much as the structure of the board, but the "independence" between the board and the CEO it monitors. Specifically, we find that insider boards monitor more of their firms' CEOs if the CEO is hired from outside than from within. In addition, outsider boards monitor both inside and outside CEOs the same way. We also find little difference between insider and outsider boards when they monitor outside CEOs. The main contribution of this paper is to show that an insider board can be an effective monitor as long as it is independent of the CEO. In other words, what is important is board independence, not board structure per se. In chapter two, we examine the relation between the change in a firm's value and its CEO selection sources: internal promotion versus external hire in both high and low product competition environments. Our results show that firms will be better off hiring an outside CEO (external hire) when the firms operate in a low product competition industry. Specifically, the evidence shows that hiring an outside CEO for a firm in a low product competition industry will increase the firm's value by about 3% for the entire tenure of the CEO. The main contribution of this paper is to show that product market competition is an important factor in CEO selection.

I propose that CEO employment history is an observable characteristic that reveals the CEO’s unobservable risk-taking preferences. I hypothesize that CEOs that change employers more frequently (mobile CEOs) have a propensity to bear risk and implement riskier firm policies. Using a sample of S&P 1500 CEOs, I find that firms are more likely to hire mobile CEOs when the firm’s prior risk is high, firm-specific human capital is less important, the prior CEO turnover is forced, the prior CEO has a shorter tenure and the board is smaller and has fewer insiders. Mobile CEOs increase financial leverage, invest more in advertising and less in capital expenditures, and increase firm-specific risk. Mobile CEOs invest more (less) in R&D in homogenous (heterogeneous) industries where firm-specific knowledge is less (more) important in making investment decisions. Shareholders react positively to appointments of CEOs who change employers more frequently. I find no difference in long-run accounting performance for CEOs with different employment histories. Firms’ annual stock returns and sales growth are higher for CEOs who change employers more frequently. The cost of debt increases after the firm appoints a mobile CEO. These findings suggest that lower CEO risk aversion and the potential risk-shifting from shareholders to bondholders are sources of shareholder value increases. In sum, my findings provide evidence that CEO employment history is an observable characteristic that reveals the risk-taking preference of the CEO.

My dissertation focuses on foreign entrepreneurs—individuals who establish firms outside of their native countries. Despite the prevalence of foreign entrepreneurs, their strategic choices have received little attention in the research literature. For example, when starting a firm, an entrepreneur must decide whether to manage the business personally or hire a local manager, yet we know little about how this choice affects firm performance. To examine this issue, in the first study I use a novel dataset of foreign entrepreneurial firms in Russia and a visa policy change as an instrument for the owner-manager choice. Contrary to the expectation that foreign entrepreneurs would underperform local managers due to the liability of foreignness, I find that foreign owner-managers can benefit their firms: Exogenous assignment of a local manager in place of a foreign owner-manager reduces profits. Foreign owner-managers benefit their firms by hiring cheap native-country labor as well as through reduced agency costs. The second study examines how private benefits of occupying a managerial position affect an entrepreneur’s choice between owner-management and hiring an agent. I show that foreign entrepreneurs with a strong desire to reside in a host country are more likely to become owner-managers. These results are consistent with the idea that entrepreneurs expecting to gain private benefits from managing their firms are more likely to become owner-managers. Moreover, I demonstrate that entrepreneurs are willing to substitute the non-pecuniary benefits associated with relocation for firm profit. These findings add to a growing literature exploring the role of personal preferences in entrepreneurs’ strategic decisions, such as location choice and ownership structure. The third study examines the impact of media coverage on the location choices of foreign firms. Publicly available media information has largely been ignored by the location literature, perhaps because its impact on location choice is expected to be trivial. This study challenges this assumption: Using a new instrument for media coverage (a major anniversary of a city’s establishment date), I show that extensive foreign media coverage of a city increases the number of foreign entrants. Moreover, this effect is strongest for socially and geographically distant firms and entrepreneurs.

Inledning: Historiskt sett har Sverige varit skonade och haft förhållandevis få vd-byte. På senare år har dock omsättning på vd:ar ökat vilket aktualiserat frågan: ‘’Vem blir bolagets nya vd, när ett bolag skall rekrytera?’’. Rekryteringen påverkas av framför allt interna aktörer (styrelsen, styrelseordförande och tidigare vd) och det är dessa aktörers demografiska egenskapers (ålder, kön och nationalitet) påverkan som testas i studien. Syfte: Syftet med studien är förklara hur demografiska egenskaper, från styrelsen, styrelseordföranden och tidigare vd, påverkar valet vid rekrytering av ny vd. Metod: Undersökningen utgår från befintlig teori och har således en deduktiv ansats. Hypoteser formuleras utifrån teorin om homosocial reproduktion och utgår från de interna aktörerna styrelsen, styrelseordförande och tidigare vd. Kvantitativ metod tillämpas och omfattningen är samtliga bolag på OMX Stockholm som haft vd-byten under 2011-2016. Resultat och slutsats: Undersökningens resultat visar att det är styrelsen och styrelseordförande som påverkar den nya vd:ns nationalitet, vilket är i linje med antagandena från homosocial reproduktion. Resultatet visade inget stöd för ålder och kön från någon av aktörerna. / Introduction: Historically Sweden has had relatively few CEO-substitutions. In recent years the turnover on CEOs has increased, which has justified the question: “Who becomes the new CEO when a company is recruiting?” Recruitment is primarily influenced by internal players (the board, chairman of the board and former CEO) and the demographic characteristics (age, gender and nationality) of these actors tested in the study. Purpose: The purpose of the study is to explain how demographic characteristics, from the board, the chairman of the board and former CEO, affect the selection when recruiting a new CEO. Method: The study is based on existing theory and has a deduction method. Hypotheses are formulated on the basis of the theory of homosocial reproduction and based on the internal actors, the board, chairman of the board and former CEO. Quantitative method is applied and the extent is all companies in OMX Stockholm who had the CEO replaced in 2011-2016. Results and conclusion: The results of the survey show that it is the board and chairman of the board that influences the new CEO's nationality, which is in line with the assumptions of homosocial reproduction. The result showed no support for age and gender from any of the actors.

Definition and basic theoretic information about Corporate Governance of big industry company Description and Analyse of corporate Management, the functions of Top Management Members, their role in relationship to owners / shareholders (describtion of used tools for internal control of government, investment and tools for financial analyses)

Stock options increasingly feature as part of CEO compensation, and there is evidence that CEOs of South African listed target companies engage in the practice of awarding themselves more options prior to takeover. This finding is consistent with CEO behaviour of foreign companies as explained by literature. After the recent financial crisis of 2008, there is a greater likelihood that financially stable companies might consider acquiring struggling companies with attractive potential future earnings. By gaining insight into the practices of stock option grants to CEOs, acquiring companies can ensure fair practice as well as not paying an undue premium for a target company. This study was conducted using a sample of 39 Johannesburg stock exchange (JSE) listed target companies, which were acquired during the period 2005- 2009. The focus was on the number of options awarded prior to the announcement date of the takeover in relation to subsequent options awarded. A median test, together with a Chi-squared test was used to evaluate the independence of option grants prior to acquisition and the actual acquisition transaction. Strong evidence was found that these two activities are not independent. Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

CEO compensation is an important issue since shareholders, politicians, regulators, and the media have different opinions on the appropriate level. Critics argue that CEO compensation is excessive due to the weak link to firm performance, but even though the field has been thoroughly researched there are mixed findings regarding the relationship between CEO compensation and firm performance. Literature suggests that this could be due to that each economy is unique and has its specificities when determining CEO compensation. CEO compensation in Sweden is generally lower than in the US and Britain, but the performance of the firm is the same or even better. Therefore, the aim of this paper was to study the relationship between CEO compensation and firm performance in the Swedish context. Through a univariate, bivariate, and multivariate analysis of 38 firms on the Nasdaq OMX Stockholm, our findings show that there is no significant relationship between CEO compensation and firm performance in Swedish listed firms when using standard control variables. This result is more consistent with the managerial power theory and less with the agency theory and contract theory. The findings suggest that there is no alignment between Swedish CEOs' compensation incentives and the shareholders' interest (i.e., firm performance).

In this paper, I examine the role of CEO age in predicting the success of startup firms, as measured by social media exposure. I use a novel measure of early-stage growth defined by increased levels of social media and online traction. I hypothesize that the age of the company’s CEO will be negatively correlated with their social media scores while controlling for the company’s total funding amounts and employee counts. My data consists of 250 United States-based startup companies that were founded between 2011 and 2015. Furthermore, they are all relatively successful in that they are still operating and have received between $100 thousand and $10 million of funding. I find that the social media score of a company is negatively impacted by the age of their CEO.

Quem acompanha o noticiário de negócios já se acostumou com as manchetes sobre os executivos e suas incríveis realizações profissionais. Eles tiram empresas da falência, salvam empregos, investem milhões, são recebidos por presidentes e ministros. Sua ascensão ao longo do século XX acompanhou a evolução da administração de empresas como ciência pesquisada por nomes como Jules Henri Fayol, Henry Ford, Frederick Taylor e Peter Drucker. Todos tentaram explicar a forma como o executivo trabalhava e, como consequência, como as organizações poderiam obter mais sucesso. Ao mesmo tempo em que subiam na hierarquia social - Drucker chegou a chamá-los de \"indispensáveis\" ao sucesso econômico -, um novo campo de estudos se desenvolveu para entender como suas carreiras aconteciam, progrediam, seja dentro ou fora das empresas. Os estudos de carreira se intensificaram a partir dos anos 1970, coincidindo com as mudanças econômicas, sociais e tecnológicas que agitaram o mundo e exigiram uma nova postura dos profissionais frente a sua carreira. No coração das empresas, as relações de emprego passaram de estáveis para instáveis, de duradouras para efêmeras. Nesse contexto de ascensão dos executivos, um cargo em especial passou a representar as aspirações de toda uma categoria: a presidência da empresa. Chegar ao topo da hierarquia organizacional significava obter os símbolos de status e poder de alguém com capacidade para decidir o destino de pessoas e empresas. Em outras palavras, alcançava o imaginário coletivo de herói corporativo, aquele que venceu todos os obstáculos rumo ao sucesso. O objetivo central deste trabalho é o de verificar se os presidentes de empresa, ao falarem de sua trajetória profissional, também se colocam na posição de herói, representando o papel que a sociedade espera deles. Realizou-se um estudo qualitativo por meio da análise de conteúdo em doze entrevistas dirigidas, concedidas por presidentes de empresa para um programa de televisão, no qual responderam a perguntas abertas sobre sua história pessoal e profissional. Constatou-se que o relato público do presidente sobre a sua trajetória possui elementos que estão presentes no conceito de monomito do herói descrito por Joseph Campbell. Foi possível encontrar na narrativa dos presidentes características compatíveis com todas as 17 etapas da jornada do herói - desde o chamado à aventura até o retorno após as conquistas. Tais etapas - que ilustram o conceito de monomito - foram usadas como categorias de análise, assim como \"mundo comum\", que examina o período anterior ao início da jornada do herói. Foram analisados, ainda, os discursos dos presidentes sobre carreira e liderança, de maneira generalizada e em relação a suas próprias experiências. Esses resultados sugerem que o presidente de empresa, quando fala publicamente sobre sua trajetória, incorpora o papel de herói corporativo. / Those who follow the business news have got used to headlines about executives and their incredible professional accomplishments. They take companies from bankruptcy, save jobs, invest millions, and are received by presidents and ministers. Their ascension to the twentieth century followed the evolution of business administration as a science searched by names such as Jules Henri Fayol, Henry Ford, Frederick Taylor e Peter Drucker. Everyone tried to explain how the executive used to work and as a consequence, such organizations could be more successful. While they climbed the social hierarchy - Drucker called them \"essential\" to economic success - a new field of study developed to understand how their careers developed, whether inside or outside companies. Career studies have intensified since the 1970s, coinciding with the economic, social and technological changes that shook the world and demanded a new attitude of the professionals in their careers. At the heart of business, employment relations went from stable to unstable, from everlasting to ephemeral. In this executive rising context, an office in particular has come to represent the aspirations of an entire category: the presidency of the company. Reaching the top of the organizational hierarchy meant getting the symbols of status and power of someone with the ability to decide the destiny of individuals and companies. In other words, it reached the collective imagination of the corporate hero, who overcame all obstacles to succeed. The main objective of this paper is to verify that CEOs, when talking of their careers, also pose as the hero figure, playing the role that society expects of them. A qualitative study was carried out using content analysis of twelve directed interviews granted by corporate CEOs for a television program, in which they responded to open-ended questions about their personal and professional history. It was found that the CEO\'s public reporting on their path has elements that are present in the concept of the hero monomyth described by Joseph Campbell. It was possible to find in the narrative of these CEOs features that are compatible with all 17 steps of a hero\'s journey - from the call to adventure to the return after the conquests. These steps - which illustrate the concept of the monomyth - were used as categories of analysis, along with the \"ordinary world\", which examines the period before the start of the hero\'s journey. We also analyzed the CEOs\' speeches on career and leadership, both generally and with regards to their own experiences. These results suggest that CEOs, when speaking publicly about their careers, personify the role of the corporate hero.

Chief Executive Offier (CEO) characteristics, such as the level of risk aversion, are known to affect corporate financial policies, and therefore are likely to impact corporate liquidity decisions. We examine changes in cash holdings around CEO turnover events, a period in which discrete changes in managerial preferences and abilities are likely to have the most dramatic effect on cash holdings. Our results suggest that cash holdings increase significantly following forced departures. The increase is persistent over the successor's tenure and is robust to controls for the standard firm-level determinants of cash holdings and corporate governance characteristics. We find that higher cash holdings arise mainly through the management of net working capital, as opposed to asset sales or reductions in investment. This suggests that the changes are optimal for shareholders rather than an indication of serious agency problems. This conclusion is supported further by our finding that the marginal value of cash does not decrease following the turnover.