The influence of institutions in Founder-CEO retention: IPO Firms in a developing country context
The influence of institutions in Founder-CEO retention: IPO Firms in a developing country context
While there are considerable advantages for firms in the early stages of their lifecycles in having their entrepreneurial founders in leading CEO position these change during the initial primary offering (IPO) process and attraction of new minority outsider investors. As such the new firm-level corporate governance mechanisms as well as larger state-level institutional characteristics exert considerable influence in governance, incentive alignment and reduction of agency between entrepreneurial founder CEO and new outsider shareholders. Using a unique hand-collected sample of 97 IPO firms from across 18 Sub Saharan African (SSA) stock markets we find evidence that IPO firms are more likely to have founders as CEO with boards characterised by fewer foreign directors, fewer nonexecutives and greater proportions of these being independent and less ownership by nonexecutives. Additionally lower government effectiveness and weaker rule of law are associated with founding entrepreneur being retained as CEO while the opposite is true of informational environment quality, including corruption control and unrestricted media.
Academy of International Business
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
Piesse, Jenifer
b85393d2-b4ae-49f2-87cd-8b5007c99e97
2 July 2012
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
Piesse, Jenifer
b85393d2-b4ae-49f2-87cd-8b5007c99e97
Hearn, Bruce and Piesse, Jenifer
(2012)
The influence of institutions in Founder-CEO retention: IPO Firms in a developing country context.
In Academy of International Business Annual Meeting, Washington DC, USA.
Academy of International Business.
26 pp
.
Record type:
Conference or Workshop Item
(Paper)
Abstract
While there are considerable advantages for firms in the early stages of their lifecycles in having their entrepreneurial founders in leading CEO position these change during the initial primary offering (IPO) process and attraction of new minority outsider investors. As such the new firm-level corporate governance mechanisms as well as larger state-level institutional characteristics exert considerable influence in governance, incentive alignment and reduction of agency between entrepreneurial founder CEO and new outsider shareholders. Using a unique hand-collected sample of 97 IPO firms from across 18 Sub Saharan African (SSA) stock markets we find evidence that IPO firms are more likely to have founders as CEO with boards characterised by fewer foreign directors, fewer nonexecutives and greater proportions of these being independent and less ownership by nonexecutives. Additionally lower government effectiveness and weaker rule of law are associated with founding entrepreneur being retained as CEO while the opposite is true of informational environment quality, including corruption control and unrestricted media.
Text
SSA_CEO-Founder_IPO_BH
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Published date: 2 July 2012
Venue - Dates:
Academy of International Business Annual Meeting, , Washington DC, United States, 2012-07-02 - 2012-07-05
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Local EPrints ID: 423301
URI: http://eprints.soton.ac.uk/id/eprint/423301
PURE UUID: ee4e5461-4c57-4306-abd3-4099bc051d24
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Date deposited: 20 Sep 2018 16:30
Last modified: 16 Mar 2024 04:37
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Author:
Jenifer Piesse
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