Abstract:
The study examined the association between Chief Executive Officers only inside board members and firm performance. The study aimed to achieve the following specific objectives; to examine the relationship between CEO power and firm return on assets, and to examine the relationship between CEO power and firm return on equity. This study has extended the existing literatures on CEO power and firm performance, presenting models grounded predominantly on agency theory, stewardship theory and resource dependency theory.
This paper used unbalanced panel data regression analysis on a sample of 15 listed firms in Dar es Salaam stock exchanges for period of thirteen years from 2005 to 2017 observed from annual reports extracted via www.africafinancials.com. To analyzing performances on panel data, researcher used both fixed effects and random effects models. The results indicated that, power from CEO only executive director do not influence firm return on assets and return on equity. Other findings confirmed no association with performance except firm size measured by natural logarithm of total assets found negatively related with return on equity.
The contributions consist of multiple outlook study of CEO power, characteristics, compensation and firm performance to broadly learn separately of their associations. The study has further extended discussion over the agency, stewardship and resource dependency theories viewpoints to seal the existing knowledge and theoretical gaps. Therefore, the evidence found from this study provides boards of directors’ practical knowledge for comprehensive governance with additional avenue for the upcoming researches in corporate governance.
Key words: Chief Executive Officers, Board of Directors, Firm Performance.
