CEO career experience and firm innovativeness: Considering the moderating effect of independent directors

Authors: Heng-Yu Chang, Cheng-Yu Lee & Ying-Jiuan Wong

Journal: Corporate Management Review. June. 2019, 39(1): 83-117.

Keywords: CEO career variety; firm innovativeness; independent director; shared expertise.

Abstract:
This study investigates the relationship between managerial attributes and firm innovativeness by examining the direct effect of CEO career variety, and the moderating effects of independent directors by building on the behavioral agency theory and motivation/cognition perspective. Using a sample of Taiwanese high-tech firms in the period 2002~2014, we found that the CEO career variety has a positive effect on firm innovativeness, and the positive moderating effect of board independence can be demonstrated only when independent directors have higher levels of shared expertise with their CEOs. These results reinforce the critical role of CEOs in driving innovation in the companies they lead and shed lights on the importance of the background commonality between CEOs and independent directors.