Executive Board Member Financial Expertise and IPO Performance

2020 ◽  
Author(s):  
Michael Ettredge ◽  
Chan Li ◽  
Qian Wang ◽  
Yang Xu
Keyword(s):  
Initial Public Offering ◽  
Chief Executive Officers ◽  
Work Experience ◽  
Board Member ◽  
Chief Executive ◽  
Chief Financial Officers ◽  
Board Members ◽  
Executive Board ◽  
Ipo Performance ◽  
Financial Expertise

Chief executive officers (CEOs) and chief financial officers (CFOs) can serve on the boards of the firms that employ them. We investigate the effects of having these executive board members, and the effects of their financial expertise, on initial public offering (IPO) outcomes. Specifically, we investigate the effects of three types of executive board member financial expertise: that obtained via prior accounting-based, user-based, and supervisory-based work experience. The results suggest that executive board members with accounting-based experience use their knowledge and experience to decrease information asymmetry at the IPO, leading to lower underpricing. Neither of the other two types of financial expertise helps to improve IPO underpricing. We also find that executive board members with accounting-based experience are associated with shorter IPO preparation times, and less downward IPO offer price adjustments. Our results suggest that IPO firms experience benefits when executives having accounting expertise serve on their boards.

CEO Financial Background and Audit Pricing

2016 ◽  
Vol 30 (3) ◽  
pp. 325-339 ◽  
Author(s):  
Rachana Kalelkar ◽  
Sarfraz Khan
Keyword(s):  
Financial Reporting ◽  
Chief Executive Officers ◽  
Work Experience ◽  
Audit Committee ◽  
Reporting Quality ◽  
Chief Executive ◽  
Audit Fees ◽  
Fixed Effect Model ◽  
Audit Pricing ◽  
Advantages And Disadvantages

SYNOPSIS Accounting scholars theorize that audit price is a function of a client's audit and business risk. Existing research finds that the functional expertise of Chief Executive Officers (CEOs) in finance improves financial reporting quality (Matsunaga, Wang, and Yeung 2013), increases profitability, and reduces the likelihood of firm failure (Custodio and Metzger 2014). These factors suggest that auditors' engagement risk decreases when incumbent CEOs possess financial expertise, raising the likelihood that auditors will charge these firms lower fees. In this study, we examine whether CEOs' work experience in accounting- and finance-related jobs affects audit fees. Using a panel of U.S. firms between 2004 and 2013, we find that firms that have a financial expert CEO pay lower audit fees. Our results are robust to various specifications, including firm-fixed effect model and specifications that control for other CEO- and Chief Financial Officer (CFO)-specific and audit committee characteristics. Our findings thus add to the literature on the advantages and disadvantages of a functional background of top managers and how this background can create value for a firm through savings in audit fees.

scholarly journals HOME CARE EXECUTIVES SAY MEDICARE HOME HEALTH PAYMENT SYSTEM ENCOURAGES LESS-IS-BETTER PRACTICE

2019 ◽  
Vol 3 (Supplement_1) ◽  
pp. S301-S301
Author(s):  
William D Cabin
Keyword(s):  
Chief Executive Officers ◽  
Medical Model ◽  
Chief Executive ◽  
Prospective Payment System ◽  
Home Health ◽  
Payment System ◽  
Chief Financial Officers ◽  
Medicare Advantage ◽  
Home Health Aide ◽  
Executive Officers

Abstract There has been an increasing trend for Congress and the Centers for Medicare and Medicaid Services (CMS) to add non-skilled services to coverage under Medicare Advantage and Medicaid inpatient hospital. At the same time there has been a 75% decline in home health aide visits, the only Medicare home health non-skilled service, as a percentage of all Medicare home health visits from 2000-2016. A literature review indicates no studies addressing the potential factors accounting from these seemingly contradictory trends. The present study is based on interviews of five Chief Executive Officers (CEOs), five Chief Financial Officers (CFOs), and eight Chief Nursing Officers (CNOs) from Medicare-certified home health agencies between October 2017-July 2018. Results indicated agreement among interviewees on three themes: the Medicare home health relies on a medical model which focuses on intermittent skilled care; the Medicare home health prospective payment system (PPS) exacerbated the focus on skilled care by rewarding higher reimbursement for skilled care based episodes; and a synergy has evolved of “less is better” regarding utilization of home health aide services and reimbursement. Policymakers are urged to consider adding coverage of non-skilled services under Medicare home health, similar to Medicare Advantage, by funding demonstration projects with appropriate changes in reimbursement.

Discretionary powers in the Austrian Private Foundation Law

2020 ◽  
Vol 26 (6) ◽  
pp. 512-518
Author(s):  
Daniela Olbrich
Keyword(s):  
Decision Making ◽  
Supreme Court ◽  
Board Member ◽  
Board Members ◽  
Wide Scope ◽  
Executive Board ◽  
Private Foundation ◽  
Discretionary Powers

Abstract The fact that only an objective qualification of the foundation board is decisive with regard to its liability is sufficiently ruled by the Austrian Supreme Court. However, in the end the board member is left alone with the question of what is required in concrete terms. A recent decision of the Austrian Supreme Court granting the foundation’s executive board an extremely wide scope for decision-making where the foundation statute does not provide detailed guidelines came as a surprise. This article deals with the issues faced by foundation board members in avoiding liability when exercising their powers and the need to limit the wide discretionary powers of such board members by creating an adequate statutory framework.

scholarly journals Degree Of Internationalization A Multidimensional Challenge

2013 ◽  
Vol 25 (3) ◽  
Author(s):  
Lutz Sommer
Keyword(s):  
International Relations ◽  
International Education ◽  
Work Experience ◽  
Board Members ◽  
Executive Board ◽  
Present Survey ◽  
Future Studies ◽  
Key Indicator ◽  
The One ◽  
Executive Boards

Studies dealing with the internationality of executive boards of large enterprises show that their internationality as measured by share of foreign sales differs significantly from the internationality of the enterprise activities. This was confirmed by the present survey on medium-sized enterprises from Singapore. Furthermore, it could be noticed that on the one hand that in order to explain exeutive board internationality, the internationality indicator International work experience of the executive board members has a high importance compared to the three other indicators examined, i.e. multinationality expressed as the board members nationality, international education, and international relations. On the other hand this indicator is the only one that has a measurable influence on the internationality of the enterprise activities the latter being measured by the companys share of foreign sales. This lets indicator multi-nationality that is frequently used in literature as a key-indicator of the internationality of an executive board appear to be overrated compared to other indicators generally used in studies on internationality. Thus, future studies in the field should consider its rather limited explanatory value.

scholarly journals Ovlasti nadzornog odbora u svezi s nadzorom uprave sportskog dioničkog društva

2019 ◽  
Vol 56 (2) ◽  
pp. 377-399
Author(s):  
Ratko Brnabić
Keyword(s):  
Board Member ◽  
Supervisory Board ◽  
General Meeting ◽  
Point Of View ◽  
Board Members ◽  
Executive Board ◽  
Checks And Balances ◽  
Management Board ◽  
Management Measures ◽  
Executive Body

The Supervisory Board of the Sports Joint stock Companies acts as the representative organ of the shareholders between the General Meeting and the Executive Board: the General Meeting elects (or privileged person/shareholder simply names) the members of the Supervisory Board, and the Supervisory Board appoints the members of the Management. From this point of view, one could see the General Meeting as the supreme body of the company. But the Supervisory Board, in the carefully balanced interaction of the three bodies, known as a system of "checks and balances", also has considerable independence from the General Meeting. According to the organizational organization of the Joint stock Companies, the general meeting is not superior towards the two other organs. In particular, the Supervisory Board and its members are not subjects to any instructions from the General Meeting. Neither the election of a member of the Supervisory Board by the General Meeting nor the appointment of a Supervisory Board member by a shareholder (entitled to name his representative) constitutes an imperative mandate for those members. On the other hand, the option of dismissal, which is legally available at all times, as a rule ensures that the Supervisory Board members will not act against the wishes of the General Meeting. Management measures cannot be delegated to the Supervisory Board. However, it must be determined by the Articles of Association or by resolution of the Supervisory Board that certain types of transactions may only be carried out with the approval of the Supervisory Board. By this right, the Supervisory Board will not become an executive body, equal with the Management Board, even in the case of transactions requiring approval: it can neither undertake the transactions in question itself, nor can it instruct the Executive Board to carry them out. The initiative remains with the Executive Board, which, even with the approval of the Supervisory Board, can still refrain from carrying out the business if it no longer considers it to be sensible and/or reasonable. The Management also remains fully responsible for the business with regard to liability; the approval by the Supervisory Board does not exempt them from an obligation to pay compensation for damages incurred. The Supervisory Board thus has the opportunity, by refusing its consent, to prevent the conduct of business intended by the Management Board.

scholarly journals Personal infidelity and professional conduct in 4 settings

2019 ◽  
Vol 116 (33) ◽  
pp. 16268-16273 ◽  
Author(s):  
John M. Griffin ◽  
Samuel Kruger ◽  
Gonzalo Maturana
Keyword(s):  
Police Officers ◽  
Chief Executive Officers ◽  
Chief Executive ◽  
Securities And Exchange Commission ◽  
Chief Financial Officers ◽  
Financial Advisors ◽  
Professional Misconduct ◽  
Corporate Misconduct ◽  
Marital Infidelity ◽  
Wide Range

We study the connection between personal and professional behavior by introducing usage of a marital infidelity website as a measure of personal conduct. Police officers and financial advisors who use the infidelity website are significantly more likely to engage in professional misconduct. Results are similar for US Securities and Exchange Commission (SEC) defendants accused of white-collar crimes, and companies with chief executive officers (CEOs) or chief financial officers (CFOs) who use the website are more than twice as likely to engage in corporate misconduct. The relation is not explained by a wide range of regional, firm, executive, and cultural variables. These findings suggest that personal and workplace behavior are closely related.

Executive Network Centrality and Corporate Reporting

2021 ◽  
Author(s):  
Jing He
Keyword(s):  
Chief Executive Officers ◽  
Fixed Effects ◽  
Social Power ◽  
Chief Executive ◽  
Chief Financial Officers ◽  
Network Centrality ◽  
Corporate Reporting ◽  
Internal Governance Mechanisms ◽  
Financial Misreporting ◽  
Executive Officers

This paper investigates the association of corporate reporting and executive network centrality, which measures an executive’s relative position in a massive network consisting of outside corporate leaders. I find that high-centrality chief executive officers (CEOs) and chief financial officers (CFOs) are generally more likely to engage in financial misreporting than low-centrality CEOs and CFOs. I also find that the influence of CFO network centrality is greater than that of CEOs in financial misreporting. Further analyses show that the monitoring effect of internal governance mechanisms on high-centrality executives is very limited and that the discipline of the managerial labor market is weaker for high-centrality CFOs as well. My results hold for a subsample subject to exogenous shocks to CFO connectedness and are robust to a series of alternative specifications including using CFO fixed effects. Taken together, my findings suggest that corporate reporting can be influenced by executives’ social network position, with high-centrality CFOs using their social power to make adverse corporate reporting decisions to gain personal benefits. This paper was accepted by Brian Bushee, accounting.

scholarly journals Top executive compensation in less developed capital markets

2015 ◽  
Vol 15 (1) ◽  
pp. 122-133 ◽  
Author(s):  
Ivo Nuno Pereira ◽  
José Paulo Esperança
Keyword(s):  
Executive Compensation ◽  
Capital Markets ◽  
Chief Executive Officers ◽  
Chief Executive ◽  
Chief Financial Officers ◽  
Tobit Regression ◽  
Content Type ◽  
Variable Pay ◽  
Tobit Regression Analysis ◽  
Executive Officers

Purpose – This paper aims to study the determinants of variable compensation for top Portuguese executives (chief executive officers, chief financial officers and commercial directors). Design/methodology/approach – Data from 101 firms were collected through an email questionnaire sent to the human resource directors of 500 largest and best Portuguese firms of Exame, a business newspaper. A Tobit regression analysis was used to estimate the basic equation of the study. Findings – The conclusions are generally consistent with findings obtained in more developed capital markets. It was found that public and older corporations are more intensive users of variable pay, consistent with the agency theory prediction. A location in the centre of economic activity and a higher executive education increase the propensity to receive higher levels of salary in the form of variable compensation. The relation between compensation and performance was more elusive. Research limitations/implications – There are limitations as to the extrapolation of the obtained results, as the level of potential idiosyncrasy cannot be measured. Ideally, the study should be replicated in different contexts to control for country-specific influences. Nevertheless, the main finding that performance-related pay mechanisms are less used in countries where public corporations and potential agency problems are less pervasive should hold. Originality/value – As the focus is on a small economy with a developing capital market, this paper contributes to executive compensation literature that has mostly analysed firms based in well-developed capital markets, with a higher separation of ownership and control (Anglo-Saxon countries).

scholarly journals Are CEO experience and financial expertise associated with financial restatements?

2021 ◽  
Vol 24 (2) ◽  
pp. 270-281
Author(s):  
Zabihollah Rezaee ◽  
Kaveh Asiaei ◽  
Toktam Safdel Delooie
Keyword(s):  
Financial Reporting ◽  
Work Experience ◽  
Reporting Quality ◽  
Chief Executive ◽  
Director General ◽  
Negatively Associated ◽  
Financial Expertise ◽  
Financial Restatements ◽  
The Board Of Directors ◽  
Financial Expert

Este estudio examina si la experiencia del director general (CEO) y los conocimientos financieros afectan a las reformulaciones financieras (FR), y cómo lo hacen, investigando una muestra de empresas iraníes que cotizan en bolsa entre 2008 y 2017. Definimos a los consejeros delegados con experiencia como aquellos que son contratados desde dentro de la empresa y a los consejeros delegados expertos en finanzas como aquellos que poseen una cualificación contable o tienen experiencia laboral como auditor, director financiero (CFO), controlador u otros puestos relacionados con la contabilidad. Encontramos que FR está positivamente asociado a los CEOs con información privilegiada (CEOs con más experiencia interna), y negativamente asociado a la experiencia financiera del CEO. Además, encontramos que la experiencia del CEO se asocia negativamente con FR cuando el CEO es un experto financiero. Este resultado pone de manifiesto la importancia de la experiencia financiera de los altos ejecutivos. Además, nuestros resultados muestran que los directores generales con información privilegiada pueden mejorar la calidad de la información financiera reduciendo FR cuando tienen mayor poder de decisión. Este estudio contribuye a la literatura sobre las características de los directores generales y la información financiera. Los resultados ofrecen importantes implicaciones para los responsables políticos y los consejos de administración de las economías emergentes en lo que respecta a la exigencia de nombrar a altos directivos con conocimientos financieros. This study examines whether and how Chief Executive Officer (CEO) experience and financial expertise affect financial restatements (FR) by investigating a sample of Iranian listed companies from 2008 to 2017. We define experienced CEOs as those who are hired from inside the firm and financial expert CEOs as those who hold an accounting qualification or have work experience as an auditor, chief financial officer (CFO), controller, and or other accounting-related positions. We find that FR is positively associated with insider CEOs (CEOs with more internal experience), and negatively associated with CEO financial expertise. Moreover, we find that CEO experience is negatively associated with FR when the CEO is a financial expert. This result highlights the importance of financial background for senior executives. Further, our results show that insider CEOs can improve the financial reporting quality through reducing FR when they have higher decision-making power. This study contributes to the literature on CEO characteristics and financial reporting. The results provide important implications for policymakers and the board of directors in emerging economies regarding the requirement to appoint top managers with financial expertise.

scholarly journals Effects of Activity-Based Hospital Payments in Israel: A Qualitative Evaluation Focusing on the Perspectives of Hospital Managers and Physicians

2020 ◽  
Author(s):  
Ruth Waitzberg ◽  
Wilm Quentin ◽  
Elad Daniels ◽  
Yael Pald ◽  
Reinhard Busse ◽  
...  
Keyword(s):  
Chief Executive Officers ◽  
Qualitative Evaluation ◽  
Chief Executive ◽  
Organizational Factors ◽  
Economic Incentives ◽  
Public Hospitals ◽  
Chief Financial Officers ◽  
Payment Reform ◽  
Lengths Of Stay ◽  
Related Group

Background: Since 2010, Israel has expanded the adoption of procedure-related group (PRG) based payments for hospitals. While there is a rich quantitative literature that assesses the effects of payment reforms on efficiency or quality of care, very few qualitative studies have focused on the impacts of diagnosis-related group (DRG)-like payments on hospitals from the perspective of hospital workers as change agents. Methods: We used a qualitative, thematic analysis based on 33 semi-structured in-depth interviews with chief executive officers (CEOs), chief financial officers (CFOs), ward directors and physicians conducted in five public hospitals in Israel, sampled by maximum variation according to hospital characteristics. Results: Interviewees reported that the payment reform led to organizational changes such as increased transparency and enhanced supervision. Interviewees also reported several actions in response to the economic incentives of PRGbased payment. These included (1) shifting activities to afterhours and using operating rooms (ORs) more efficiently to enable increased surgical volumes; (2) reducing costs by shortening lengths of stay and increasing cost-consciousness in procurement; and (3) increasing revenues by improving coding and selecting procedures. Moderating factors reduced the effects of the reform. For example, organizational factors such as the public nature of hospitals or the (un)availability of healthcare resources did not always allow hospitals to increase the number of cases treated. Also, conflicting incentives such as multiple payment mechanisms or underpricing of procedures blurred the incentives of the reform. Finally, managers and physicians have many other considerations that outweigh the economic ones. Conclusion: PRG payments affected the organizational dynamics of hospitals and changed decision-making about admission and treatment policies. However, such effects were moderated by many other factors that should be considered when shaping and analyzing hospital payment reforms.

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