Does shared tenure between board of directors and CEO affect R&D investment?

Alaa Alhaj-Ismail, Salem Alhababsah and Azzam, Ala’a

International Review of Financial Analysis, 2025, vol. 97, issue C

Abstract: Psychology literature suggests that shared tenure between individuals affects how they communicate and share information. Given that the relationship between board of directors and CEO involves extensive interactions and information-sharing to maintain shareholders' interests, this study seeks an answer as to whether that shared tenure between directors and CEO affects R&D investments. Using a sample of firms listed in the UK FTSE350 index between 2010 and 2019, we find that directors–CEO shared tenure positively affects R&D intensity. The study has implications for corporate governance and strategic management literature by highlighting Board–CEO shared tenure as a new factor affecting R&D investments. This study has implications for practice and policy-makers. In particular, companies that are eager to strengthen corporate governance and maintain sustained innovation might consider the shared tenure between directors and CEO.

Keywords: Shared tenure; Board tenure; CEO tenure; R&d (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:97:y:2025:i:c:s1057521924006197

DOI: 10.1016/j.irfa.2024.103687

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