Green CEO, managerial ability and environmental performance

Effective decision-making relies on access to timely and accurate information, which is widely regarded as a valuable asset in the capital market. Accounting information is no exception, and it is critical for managers to provide such information promptly to advance their firms' economic activities. This study investigates the relationship between managers' ability and the timeliness of financial reporting, testing three research hypotheses through linear regression analysis. The statistical population comprises 115 firms listed on the Tehran Stock Exchange between 2012 and 2021, with 1150 firm-year observations. The delay in the auditor's report serves as a proxy for financial reporting timeliness. Managers' abilities are measured using Demerjian et al.'s model [1]. The findings reveal a significant, positive relationship between managerial ability and the timeliness of financial reporting, indicating that higher managerial ability is associated with lower financial reporting delay. Additionally, the results suggest that the relationship between managerial ability and financial reporting timeliness is moderated by the size of the auditing firm and the firm itself.

[Purpose]This study investigates the effect of CEO characteristics on the relationship between managerial ability and firm value in the bio-pharmaceutical industry. [Methodology]For the analysis, we employ the Demerjian et al.(2012) method to measure the managerial ability, we verify the difference between bio-pharmaceutical and non-bio-pharmaceutical firms in the effect of managerial ability on firm value. And then we analyze the differential effect of managerial ability according to the CEO characteristics, such as tenure, age, ownership, and major, in bio-pharmaceutical firms. [Findings]The effect of managerial ability on firm value is higher for bio-pharmaceutical firms than non-bio-pharmaceutical firms. And the effect of managerial ability on firm value increases when the CEO is a business owner, older(relatively), or the CEO’s tenure increases. These results imply that high-ability managers in bio-pharmaceutical firms can have a positive effect on firm value if the managers continue to implement investment and innovation activities over a long time through decision-making to create future profitability. In an additional analysis, the managerial ability of firms listed by technology exception policy has a greater influence on firm value than that of regularly listed firms, but the CEO's characteristics rather reduced the effect. [Implications]This study suggests the need for detailed research according to industrial characteristics by confirming that the effect of managerial ability on firm value varies according to the characteristics of each industry to which the firm belongs. In addition, in the case of listed companies by technology exception policy, it is necessary to conduct additional analysis by expanding the research period and samples to be studied in the future as they exhibit different characteristics from general companies.

PurposeThis paper aims to examine the effects of managerial ability (MA) on the likelihood and the timeliness of goodwill impairment and explore whether the desirable effect of MA vary with the degree of agency problems.Design/methodology/approachThe authors propose a unified framework to simultaneously examine the effects of MA on the likelihood and the timeliness of goodwill impairment by incorporating a market-based impairment indicator (denoted as BTM), MA and the interaction of BTM with MA to this study’s regression model to account for the likelihood of goodwill impairment. BTM addresses the timeliness of goodwill impairment.FindingsThis study finds that firms with higher MA have lower likelihood of goodwill impairment, and such firms are more likely to recognize goodwill impairment in a timely manner when the underlying value of goodwill is economically impaired. This desirable effect of MA is more pronounced in non-state-owned enterprise (SOEs) and firms without chief executive officer (CEO) duality.Practical implicationsFirms can reduce the losses arising from goodwill impairment by enhancing the ability of their management teams combined with improved corporate governance structure.Originality/valueThis paper provides novel insights on understanding the role of MA in not only reducing the likelihood but also enhancing the timeliness of goodwill impairment. The findings help advance the upper echelons theory by uncovering the heterogenous effects of executives with different levels of ability.

Purpose This study examines the moderating effect of XBRL mandatory adoption on the association between managerial ability and corporate tax outcomes.Design/methodology/approach This study used a quantitative method with panel data regression models using a sample of listed firms on the Indonesia Stock Exchange from 2010 to 2019.Findings The regression results indicate that XBRL adoption moderates the relationship between managerial ability on tax avoidance and tax risk. Firms with higher managerial ability have relatively greater tax avoidance practices and lower tax risk following XBRL adoption. In this study, the authors document unfavorable and unexpected consequences of XBRL in an emerging country.Research limitations/implications Results are from a sample of firms from one emerging country.Practical implications It becomes important and necessary to develop more and better taxonomies with standardized extensions related to taxes information in the XBRL financial reporting to support the tax administrator’s performance in assessing firms’ tax avoidance and tax risk. The authors underscore the importance of improving taxes tags, including tags from financial statements and the disclosure section. This study may also inform policymakers in other countries that more adequate tax tags are needed to leverage benefit from XBRL adoption in monitoring and assessing corporate tax avoidance and tax risk.Originality/value This study is among the first to test an explanation for the moderating role of XBRL adoption on the association between managerial ability and corporate tax avoidance and tax risk.

Managerial ability and analysts’ stock recommendations

The new prudential regulation framework, established by the European Central Bank (ECB) after the financial crisis encompasses supervisory procedures to measure and monitor bank business models, capital requirements, governance arrangements and liquidity risk. However, research on financial stability has revealed that, during financial crises, it would have been essential to monitor the vulnerability of banks by also assessing the value of their intangible assets. We contribute to the extant literature by examining the impact of a specific intangible asset—namely, managerial ability—on bank risk-taking. Given the interest of the regulatory authority in monitoring financial stability, we quantify management ability and document its double effects on bank risk-taking: the indirect effect through franchise value and its direct effect. We examine a sample of listed banks from 15 EU countries over the period 1997–2016. We find that higher managerial ability is associated with higher franchise value, contributing to a decrease in bank risk-taking (indirect effect), particularly for small banks and during financial crisis. Moreover, managerial ability reduces bank risk-taking through its direct effect. Our evidence suggests that managerial ability could be considered a measure (easily estimated) for regulating the disciplinary role of franchise value and, used in combination with current regulatory measures, could lead to supervisors achieving more effective management oversight.

Are voluntary internal control weakness disclosures in initial public offerings associated with managerial ability and subsequent financial reporting quality?

PurposeThis paper aims to examine the effect of managerial ability (MA) on real earnings management and the effect of real earnings management by higher ability managers on future profitability, at a different level of the crime rate.Design/methodology/approachThe research sample includes 864 manufacturing firms-years listed on the Indonesian Stock Exchange. MA uses an efficiency score by data envelopment analysis. Real earnings management is measured by abnormal activities. The crime rate is measured by logarithm natural of the number of crimes per 100.000 citizens in the region where the firm is headquartered. Data analysis uses fixed-effect regression.FindingsMA increases real earnings management in the region where the firm is headquartered with a higher crime rate while MA will reduce real earnings management in the region where the firm is headquartered with a lower crime rate. Also, real earnings management by higher-ability managers gives a signal of better future profitability in the region where the firm is headquartered with a lower crime rate.Originality/valueThis research contributes to filling the previous gap of managerial characteristics ability-related on real earnings management by providing regional crime rate as a determinant factor of managers’ ethical behavior. This research is the first one to considers the regional crime rate treatment to the relationship between MA and real earnings management especially in Indonesia. This research also provides new evidence of efficient real earnings management for a lower crime rate group of samples to give a signal of better future profitability.

Recent surveys indicate that America's chief executive officers (CEOs) are getting older. While aging is often associated with greater experience, improved skill sets and higher job performance, prior research warns that aging can also lead to a significant decrease in cognitive function, energy, ambition and, consequently, the ability of CEOs to manage their firms. We examine this issue and find that older CEOs display significantly lower managerial ability as compared to younger CEOs. Exploring differences in firm factors, we further find that older CEOs exhibit significantly lower managerial ability when managing high‐technology firms and significantly higher managerial ability when managing more mature, highly regulated firms. Collectively, our study provides new evidence that while managerial ability decreases with age, firm characteristics significantly moderate this relationship.

This research examines the influence of Leverage, Liquidity, Profitability, and Institutional Ownership on Firm Value, with Environmental Performance as a moderating variable. The study focuses on coal sub-sector companies listed on the Indonesia Stock Exchange (IDX) from 2019 to 2023. Using purposive sampling, 14 companies were selected as research samples. Panel data regression analysis was employed. The findings reveal that Leverage and Institutional Ownership do not affect Firm Value. Liquidity negatively affects Firm Value, while Profitability has a positive impact. Environmental Performance does not directly influence Firm Value but moderates certain relationships. Specifically, Environmental Performance strengthens the effect of Liquidity and Profitability on Firm Value but does not moderate the impact of Leverage. The study’s managerial implications highlight the importance of fundamental factors such as profitability, leverage, and dividend policy in enhancing Firm Value. Additionally, companies should recognize Environmental Performance as a moderating factor that can reinforce certain financial influences. Management is encouraged to adopt sustainable business practices to improve both financial performance and environmental responsibility.

PurposeOrganizations desire to achieve green legitimacy and regulatory stakeholder demands and have been potent in influencing the adoption and implementation of social and environmental responsibilities in current business settings. Perceiving that social and environmental responsibilities that promote social growth and environmental sustainability have shifted from being optional to mandatory for organizations, this study from the perspectives of institutional and stakeholder theories elucidates the efficacy of green legitimacy and regulatory stakeholder demands on the adoption of social and environmental responsibilities at the organizational level and how these variables relate with environmental and financial performance in the context of an emerging economy.Design/methodology/approachThe study adopted a positivist methodological paradigm, survey research design, a quantitative approach and partial least square structural equation modelling (PLS-SEM) in making data analysis and interpretations due to its appropriateness for predictive research models.FindingsThe results highlighted that desire for green legitimacy and regulatory stakeholder demands influenced the adoption of environmental responsibility, social responsibility, environmental and financial performance. While environmental responsibility positively and robustly influenced environmental performance, social responsibility positively and significantly influenced financial performance. The findings particularly exposed that while environmental responsibility had negative and insignificant effect on financial performance, social responsibility negatively and significantly influenced environmental performance. Moreover, environmental performance was also found to be negatively and insignificantly correlated with financial performance. Based on the results, theoretical and practical implications are explained for policymakers, managers, government authorities and business owners.Originality/valueThe study is among the few to investigate how firms desire to achieve green legitimacy and regulatory stakeholder demands motivate the adoption and implementation of environmental and social responsibilities and its implications on environmental and financial performance in the context of an emerging economy. Although environmental responsibility has received significant attention in past studies, it is mostly considered a subset of corporate social responsibility. Thus, this study is among the first to explore the dimensional effects of corporate social responsibility namely environmental responsibility and social responsibility on performance in the context of an emerging economy and as individual constructs.

There are still many companies in Indonesia that do not pay attention to environmental performance. Environmental disclosure performance is currently mandatory disclosure, so it is mandatory for go public companies to disclose their environmental performance as a manifestation of the company's responsibility for the activities it carries out. This study aims to determine the effect of environmental costs and environmental information disclosure on environmental performance in manufacturing companies listed on the Indonesia Stock Exchange from 2015-2019. The research sampling technique used purposive sampling method with data analysis using the Structural Equation Modeling method. The software used is partial least square with the Warp-PLS analysis tool. The results of testing the first hypothesis show that environmental costs have a positive and insignificant effect on environmental performance, while the second hypothesis shows that environmental information disclosure has a positive and significant effect on environmental performance. This research is important to do as a study material for the manufacturing industry related to environmental performance

PurposeIn this paper, the author attempts to answer an important question upon founder-CEOs' exiting: How do they sell their remaining ownership shares? The literature has largely been silent on this question, and therefore is missing an important piece of the puzzle on the final stage of the founding entrepreneurs' involvement in their companies.Design/methodology/approachThe author uses both theoretical models and empirical methods to examine how founder-CEOs sell their remaining ownership shares.FindingsThe author finds that founder-CEOs of high-growth firms and those with high managerial ability are more likely to sell remaining ownership shares gradually rather than suddenly. Moreover, if either the growth or the managerial ability is high, founder-CEOs managing firms with high volatility tend to sell gradually.Originality/valueThis paper provides insights into the final stage of founding entrepreneurs' involvement in companies. The methodology of pattern recognition also helps investors and regulators in tracking and monitoring stock trading of founders and other company insiders.

Managerial ability is a key determinant of firm performance. As an emerging market, the Indonesian capital market presents investors with significant opportunities, though these are accompanied by considerable risks. This study examines the relationship between managerial ability and stock price crash risk, with financial performance as a mediating variable. We utilise a sample of firms listed on the Indonesia Stock Exchange from 2013 to 2023, specifically those included in the LQ45 index, comprising a final dataset of 810 firm-year observations. Our findings indicate varied outcomes when considering the characteristics of firms in Indonesia. One important finding is that the total effect of the relationship between managerial ability and stock price crash risk, mediated by financial performance, is more potent in non-family firms than in family firms. These findings provide investors with a deeper understanding of the characteristics of the Indonesian capital market. While the market offers considerable opportunities, it also presents potential risks for investors.

This research aimed to describe and analyze: 1) the effect of principal’s managerial ability toward teacher tourism performance at vocational high school in Manado City, 2) the effect of learning facilities toward teacher tourism performance at vocational high school in Manado City, and 3) the effect of principal’s managerial ability, and learning facilities simultaneously toward teacher tourism performance at vocational high school in Manado City. Survey method was implemented with qualitative approach. Population unit were 97 teacher of tourism major at Vocational High School in Manado City. Research sample were 49 teachers which randomly selected from 97. Questionnaire with Likert scale was the technique used to collect the data. Testing the hypothesis using simple and multiple correlation analysis. The result of data analysis showed that: 1) there was effect of principal’s managerial ability toward teacher tourism performance at vocational high school in Manado City, 22,7%. 2) there was effect of learning facilities toward teacher tourism performance at vocational high school in Manado City, 51,6%. and 3) there was effect principal’s managerial ability, and learning facilities simultaneously toward teacher tourism performance at vocational high school in Manado City, 51,6%. Based on these conclusion, it could be recommended that: 1) Principal's managerial competencies to be improved so that a professional school managerial system can be formed, 2) the availability of learning facilities is more adequate, so that it raises efficiency in the learning process, 3) The regional education department is expected to be able to synergize with the school in an effort to improve the principal managerial competencies, such as in terms of education and training, improvement of academic qualifications, and assistance with learning facilities. Keywords : Teacher Performance, Managerial Abilities, Learning Facilities, , DOI : 10.7176/JEP/10-11-07 Publication date : April 30 th 2019