The Effect of CEO's Power and Financial Knowledge on the Relation between Enterprise Risk and the Firm’s Performance

Subject Areas :

Mohammad Amri-Asrami ¹ (Accounting Department , Faculty of Economics, Management and Administrative Sciences, Semnan University, Semnan, Iran.)
Fatemeh Jalali ² (Department of accounting Department , Faculty of Economics, Management and Administrative Sciences, Semnan University, Semnan, Iran.)
Fahimeh KazemiHaji ³ (Department of Accounting, Semnan University, Semnan, Iran.)

Received: 2023-07-06 Accepted : 2023-08-28 Published : 2023-09-23

Keywords: performance, Keywords: CEO's Power, CEO's Financial Knowledge, Enterprise Risk,

Abstract :

Abstract In this study, the effect of the CEO's power and financial knowledge, on the relation between enterprise risk and firm's performance has been investigated. With screening method, 102 companies were selected as a sample from the companies listed in the Tehran Stock Exchange. The tests have been done by panel data pattern with fixed effects. The results showed that enterprise risk has a negative and significant relation with the performance, therefore, with the increase of enterprise risks, the performance will become weak and the returns will decrease. The power of the CEO has a significantly negative relation with the performance, therefore, the power of the CEOs with a dual task provide the basis for their opportunism for their own interests. The financial knowledge of the CEOs has a positive and significant relation with the performance, so their financial knowledge improves the corporate governance mechanisms and improves the performance. But the CEO's power and financial knowledge have no effect on the relation between enterprise risk and the performance.

References:

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