Corporate Performance, CEO Power and CEO Turnover: Evidence from Malaysian Public Listed Companies
Prestasi Syarikat, Kuasa CEO Dan Pertukaran CEO: Bukti dari Syarikat Tersenarai Awam Malaysia

School of Accountancy, College of Business
Universiti Utara Malaysia, 06010 Sintok Kedah

rokiah@uum.edu.my

Institute for Management and Business Research
(IMBRe)
Othman Yeop Abdullah Graduate School of Business
Universiti Utara Malaysia, 06010 Sintok Kedah

norizah@uum.edu.my

Kulliyyah of Economics and Management Sciences
International Islamic University Malaysia, Jalan
Gombak, 53100 Kuala Lumpur

shamsulnahar@iium.edu.my

Abstract

This paper seeks to determine the impact of firm performance and CEO power on CEO turnover. Research in CEO turnover literature found that corporate performance is frequently used as an indicator to evaluate the effectiveness of CEO effort and findings from most of these studies indicate that the turnover rate of CEO is higher for poor performing firms when compared to well performing firms. Furthermore, social network theory and human capital theory suggest that CEOs gain their power from their educational background; skill and functional background; special expertise; experience; industry specialization; prestige; ownership; age; and length of tenure. This power will entrench the CEO in the company, thus making the decision to fire the underperforming CEO more difficult. Our results show that firms with poor performance and older CEOs are more likely to change their CEOs. In contrast, CEO turnover is less likely to occur when firms exercise CEO/Chairman duality; have CEOs who own a certain portion of company shares; and have CEOs with longer tenure.

Keywords

CEO duality; CEO turnover; Chief executive officer (CEO); Corporate performance

Citation

Ishak, R., Ku Ismail, K. N. I., & Abdullah, S. N. (2012). Corporate Performance, CEO Power and CEO Turnover: Evidence from Malaysian Public Listed Companies. Jurnal Pengurusan, 35, 33–41.

@article{ishak2012corporate,
  title={Corporate Performance, CEO Power and CEO Turnover: Evidence from Malaysian Public Listed Companies},
  author={Ishak, Rokiah and Ku Ismail, Ku Nor Izah and Abdullah, Shamsul Nahar},
  journal={Jurnal Pengurusan},
 

volume={35},
  number={},
  pages={33—41},
  year={2012},
  doi={},
  publisher={Penerbit UKM},
}

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35 (2012) 33 – 41

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