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RESEARCH PRODUCT
Do Powerful CEOs Have an Impact on Microfinance Performance?
Roy MerslandRients GalemaRobert LensinkRobert Lensinksubject
MicrofinanceComputingMilieux_THECOMPUTINGPROFESSIONbusiness.industrymedia_common.quotation_subjectCorporate governanceControl (management)ComputingMilieux_PERSONALCOMPUTINGStakeholderComputingMilieux_LEGALASPECTSOFCOMPUTINGAccountingDiscretionGeneralLiterature_MISCELLANEOUSlaw.inventionDual (category theory)ComputingMilieux_MANAGEMENTOFCOMPUTINGANDINFORMATIONSYSTEMSlawManagerial discretionBusinessmedia_commondescription
In this study we show that Microfinance Institutions (MFIs) with more powerful CEOs have higher performance variability. A powerful CEO is defined as one that also chairs the board of directors. CEO power is reflected in higher performance variability if CEOs have more latitude of action, i.e. managerial discretion. Managerial discretion can be limited by having stakeholder electives on the board. We find that CEO power only has an effect on MFI performance variability when there are no stakeholder electives on the board. Furthermore, we argue that CEOs in non-profit MFIs have more discretion, because their dual mission implies their CEOs are harder to control. We find that CEO power increases performance variability of non-profit MFI’s, while it has no effect for other MFI types.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2009-01-01 | SSRN Electronic Journal |