An organisation’s performance depends highly on its CEO’s decision-making skills. But with the CEO holding the power to exercise his will across departments, a research by David F Larcker and Brian Tayan examines to what extent is having a powerful CEO beneficial to an organisation along with its shareholders. They find that while a powerful CEO exhibits decreased inhibition and is able to implement his decisions, the overbearing nature of the position can lead to overconfidence and eventually decisions whose outcome can have positive or negative impact.

 

Title: Is a Powerful CEO Good or Bad for Shareholders?

Source: Social Science Research Network