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- Creators: Brahms, Johannes, 1833-1897
- Creators: School of Life Sciences
- Creators: Poulenc, Francis, 1899-1963
ContributorsPoulenc, Francis, 1899-1963 (Composer)
ContributorsPoulenc, Francis, 1899-1963 (Composer)
ContributorsPoulenc, Francis, 1899-1963 (Composer)
ContributorsPoulenc, Francis, 1899-1963 (Composer)
ContributorsBrahms, Johannes, 1833-1897 (Composer)
ContributorsBrahms, Johannes, 1833-1897 (Composer)
ContributorsBrahms, Johannes, 1833-1897 (Composer)
ContributorsBrahms, Johannes, 1833-1897 (Composer)
Description
Recognizing that CEOs are less capable of diversifying their employment risks than shareholders who could diversify their investment risks through portfolio investments, agency theory assumes that CEOs tend to be risk averse compared with shareholders. Based on this assumption, agency theory scholars suggest that to align the risk preference of CEOs with that of shareholders, CEOs need to be closely monitored and have less power. SEC regulators have been adopting the suggestion and accordingly CEO power has been reduced in the past decades. However, the empirical results are mixed and cannot provide solid support for the suggestion that reducing CEO power could lead the CEO to take more risks.
Considering that managerial risk taking is an important issue in strategic management research and agency theory has been widely adopted in academia and business worlds, it is imperative to clarify the mechanism behind the relationship between CEO power and risk taking. My study aims to fill this research gap. In this study I follow agency theory to take an employment security perspective and fully consider how CEOs’ concern about employment security is affected by their power and ownership structure to enrich the understanding of the effects of CEO power and ownership structure on risk taking. I fine-tune the key concept CEO power into the CEO power over board and introduce a key aspect of ownership structure - nontransient investor ownership. I further suggest that CEO power over board and nontransient investor ownership affect CEOs’ employment security and the resulting CEO risk taking. In addition, I consider a set of industry and firm characteristics as the boundary conditions for the effects of CEO power and nontransient investor ownership on CEO risk-taking. This set of industry and firm characteristics include industry complexity, industry dynamism, industry munificence and firm slack.
I test my theory using a large-scale, multi-year sample of U.S. publicly listed S&P 1500 firms between 2001 and 2017. My main hypotheses about the effects of CEO power over board and nontransient investor ownership on CEO risk taking receive strong support.
Considering that managerial risk taking is an important issue in strategic management research and agency theory has been widely adopted in academia and business worlds, it is imperative to clarify the mechanism behind the relationship between CEO power and risk taking. My study aims to fill this research gap. In this study I follow agency theory to take an employment security perspective and fully consider how CEOs’ concern about employment security is affected by their power and ownership structure to enrich the understanding of the effects of CEO power and ownership structure on risk taking. I fine-tune the key concept CEO power into the CEO power over board and introduce a key aspect of ownership structure - nontransient investor ownership. I further suggest that CEO power over board and nontransient investor ownership affect CEOs’ employment security and the resulting CEO risk taking. In addition, I consider a set of industry and firm characteristics as the boundary conditions for the effects of CEO power and nontransient investor ownership on CEO risk-taking. This set of industry and firm characteristics include industry complexity, industry dynamism, industry munificence and firm slack.
I test my theory using a large-scale, multi-year sample of U.S. publicly listed S&P 1500 firms between 2001 and 2017. My main hypotheses about the effects of CEO power over board and nontransient investor ownership on CEO risk taking receive strong support.
ContributorsZhu, Qi (Author) / Shen, Wei (Thesis advisor) / Zhu, David (Thesis advisor) / Certo, Trevis (Committee member) / Arizona State University (Publisher)
Created2019
Description
The inherent risk in testing drugs has been hotly debated since the government first started regulating the drug industry in the early 1900s. Who can assume the risks associated with trying new pharmaceuticals is unclear when looked at through society's lens. In the mid twentieth century, the US Food and Drug Administration (FDA) published several guidance documents encouraging researchers to exclude women from early clinical drug research. The motivation to publish those documents and the subsequent guidance documents in which the FDA and other regulatory offices established their standpoints on women in drug research may have been connected to current events at the time. The problem of whether women should be involved in drug research is a question of who can assume risk and who is responsible for disseminating what specific kinds of information. The problem tends to be framed as one that juxtaposes the health of women and fetuses and sets their health as in opposition. That opposition, coupled with the inherent uncertainty in testing drugs, provides for a complex set of issues surrounding consent and access to information.
ContributorsMeek, Caroline Jane (Author) / Maienschein, Jane (Thesis director) / Brian, Jennifer (Committee member) / School of Life Sciences (Contributor) / Sanford School of Social and Family Dynamics (Contributor) / Barrett, The Honors College (Contributor)
Created2018-05