The Influence of the Background and Characteristics of the Chief Executive Officer on Company Performance

Marsia Kikiana, Sari Rahmadhani

Abstract


This study aims to analyze the influence of CEO background and characteristics on company performance. Purposive sampling is the method of sampling that is employed, using information gathered from 83 financial firms that were listed between 2020 and 2022 on the Indonesia Stock Exchange. According to data analysis using multiple regression, the background characteristics of the CEO including gender, tenure, education, and experience significantly improve the performance of the business. As for CEO characteristics, duality, citizenship, stock ownership, and turnover also significantly improve business performance. These results demonstrate that according to agency theory, CEO characteristics, and background are crucial in reducing agency conflicts and enhancing company performance. CEOs with sufficient educational background, experience, and tenure are typically more successful in reaching judgments that are in line with the objectives of shareholders. Characteristics such as duality, citizenship, and stock ownership by the CEO provide greater motivation to enhance company value, while strategic turnover can bring the necessary innovation and change.


Keywords


Company Performance, CEO Background, CEO Characteristics

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DOI: https://doi.org/10.21107/jaffa.v12i2.27445

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