DOES CEO POWER MODERATE THE RELATIONSHIP BETWEEN BOARD LEADERSHIP AND STRATEGY INVOLVEMENT IN PRIVATE FIRMS? EVIDENCE FROM KENYA

Joel Kiplagat Tuwey and Daniel Kipkirong Tarus
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Joel Kiplagat Tuwey: Moi University, Kenya
Daniel Kipkirong Tarus: Moi University, Kenya

in ABEM Conference Proceedings from Academy of Business and Emerging Markets (ABEM), Canada, currently edited by Satyendra Singh

Abstract: The purpose of this study was to determine how board leadership affects board strategic involvement in private firms in Kenya and how CEO power moderates the relationship. We use Kenyan dataset to investigate what makes boards in private firms get involved in strategy. Survey data derived from CEOs of private firms was used and the hypotheses was tested using moderated regression analysis. The results indicate that board members knowledge, board chairman’s’ leadership efficacy, board members personal motivation and board members background has a positive and significant effect on board strategy involvement. We also found that CEO power moderates the relationship between board leadership and strategy involvement. The study concludes that when the CEO’s wield immense power, the board tends to become passive and submit to the direction of the CEO. The study adds value to the understanding of the effect of board leadership on strategic involvement in private firms and how the CEO power influences the relationship.

Keywords: CEO; POWER; BOARD LEADERSHIP; STRATEGY; INVOLVEMENT; PRIVATE; FIRMS; KENYA (search for similar items in EconPapers)
Date: 2015
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