A study of the impacts of ceo’s characteristics on the performance of a number of outstanding listed enterprises

tics have a strong influence on the style and working habits, and leadership, thereby affecting many different aspects of business operation. At present, there still exist many perspectives of different views and approaches on CEO's characteristics, however, from the author's perspective, it is possible to refer to the research results of Hambrick and Mason (1984) who form the basis of the approach to the personal characteristics of the CEO. In particular, Hambrick and Mason, in their research, initially affirm that the behavior of each CEO is the reflective side of a range of personal characteristics factors such as age, education level, seniority, typical characteristics. These groups of behavioral patterns influence the decisions of the CEO in the process of running a business, thereby affecting the operation outcomes and the performance of an enterprise. In summary, the CEO's personal characteristics can be divided into two main groups: (i) Demographic characteristics, (ii) Working characteristics. 1.2. Theoretical background on the performance of enterprises Business performance has long been a topic of interest to researchers because this is a measure to evaluate the effectiveness of measures and tools that enterprises have been making use of during its production and business activities. According to Hult et al. (2008), although there are many different approaches and measures of firm performance today, there are three commonly used performance measurement criteria namely financial performance, operation performance, or overall performance. While there are many different approaches and measurements of the above concept, one of the most widely studied and considered aspects is the financial aspect, which is the result of achieving the economic goals. Normally, to assess the performance of businesses according to financial aspects (financial performance) one of two ways of measurements shall be used: (i) Profit Indicator such as the ratio of profit over the total assets (ROA), the ratio of profit over the revenue (ROS), the return on equity (ROE); (ii) Market indicators such as Tobin’s Q and market return ratio. The above-stated studies reinforce the suitability of selecting ROA and ROE as a reference to evaluate the performance of enterprises in this thesis paper. 1.3. Theoretical background on family-owned enterprises Family-owned enterprises is a form of primitive economic organization that contributes greatly to the development of every economy. Moreover, this is also a type of business with many distinct characteristics. Therefore, researches on FOEs has been started since the middle of the 20th century. Basically, researches on FOEs have been conducted mainly on dissecting the nature of this type through finding a sufficiently thorough and convincing definition. Some of the studies on this topic by authors such as Litz (1995), Wortman (1995), Shanker and Astranchan (1996), Wall (1998) ... Though these authors have different approaches to the nature of this type of business, all focus on the basic factors that make up the basic characteristics of such type of business such as: family ownership, family control, number family members in executive committee. In Vietnam, fully aware of the contribution that FOEs have made to the overall development of the economy in recent years, many scholars have recently conducted research to learn about the type this business. The research system in and outside Vietnam has reaffirmed the typical character of this type of business, as well as the suitability when the thesis selects FOEs as a typical enterprise type for study. 1.4. Theoretical background on the impacts of CEO's characteristic on the performance of enterprises In the world, this research direction appeared early and there is evidence to conclude that CEO characteristics have an impact on the business operation. The results of the afore-mentioned studies around the world, in Asia and in Vietnam, once again reaffirm that CEOs have the ability to strongly impact the value of their enterprise. There are some common points when discussing the personal characteristics of the CEO and the impact of the above characteristics on the performance of an enterprise: - Presenting the concept of executive director's personal characteristics; - Pointing out the influential personal characteristics groups of CEOs such as age, gender, ownership, remuneration of the CEO ... that affect the working style and performance of the enterprise run by them; - Systematizing and classifying groups of individual characteristics according to the degree of influence / impact on the business performance. CHAPTER 2: THEORIES OF THE IMPACTS OF CEO’S CHARACTERISTICS ON THE PERFORMANCE OF LISTED FAMILY-RUN ENTERPRISES 2.1. Overview on Chief Executive Officer (CEO) 2.1.1. Concepts of CEO Following the approach from the basic management model, the CEO (Chief Executive Officer) - is the highest executive position of an organization, in charge of overall operation of a corporation, an enterprise, the organization or an agency, making the strategic decisions of the organization, and being responsible to the board of the organization. The equivalent term of the CEO can be the managing director (MD - Managing Director - MacKenzie 2006) and the executive director (CE - Chief Executive). Currently, in the world, there exist a number of different approaches to CEO. These approaches are generally dominated, influenced by business culture, corporate governance model ... The first approach: From the viewpoint of dual leadership, in some companies the CEO is also the chairman of the board. A second approach: Popular in several countries in the European Union, two separate boards of leadership exist in the operation of organizations, one in charge of day-to-day operation and one in charge of providing orientation for the company (elected from shareholders). 2.1.2. The role of the CEO in the performance of a business Depending on the organizational structure of each business, CEO will be responsible for the different roles in the operations of the organization. Basically, the role of the CEO is as a surviving factor of a business due to their executive positions. The CEO must run the company's daily business in accordance with the law, the company's charter, the labor contract signed with the company and the resolution of the Board of Directors. If operating in contravention of this regulation causes damage to the company, the Director or General Director must take responsibility before law and must pay damages to the company. Whether by the first approach (concurrently responsible responsibilities and rights, CEO and chairman of the Board of Directors) or the second approach (CEO independent of the Board of Directors), the CEO's role is generally related to every aspect of every organization's operation. 2.1.3. Requirements to CEO Requirements for the CEO in the process of running a business is most evident through the requirement of the CEO's leadership which is an important issue in businesses today. In terms of leadership qualities, the typical studies are by Stodgdill (1948, 1974), Mann (1959), Lord et al. (1986) and Kirkpartrick (1991). Regarding the competence and skills of leaders, typical studies include those of Mumford et al. (2000) and Yammarino (2000). CEO's leadership is a combination of knowledge, skills and qualities that a CEO needs in his leadership, subordinate team, organizational leadership to achieve the goals of the business. determined from the beginning. Specifically: Leadership knowledge: Leadership knowledge is theknowledge and understanding that a person acquires, accumulates through experience or learn and is capable of applying to his leadership. Leadership skills: This is the ability to perform tasks, turn knowledge into actions. Leadership skills show the proficiency of each person when applying leadership knowledge in practical management to achieve the set goals. 2.2. Overview on the personal characteristics of the CEO 2.2.1. Concepts of personal characteristics, personal characteristics of CEOs According to Holland (1960), “individual characteristics of a person are a collection of personality traits and individual psychological styles that dictate the manner in which individuals act and how they respond to their surroundings. From the perspective of behavioral psychology, psychologist Leochiev (1962) points out that: "The development of human psychology and personality is closely connected with the development of human activities in practice, in which some activities play a major (leading) role, others play a minor (auxiliary) role. Psychological studies have shown that not only the individual characteristics of people but only the characteristics that regulate people as a member of society speak up the psycho-social aspect, values ​​and personality of each individual. These attributes that make up the distinctive characteristics of each individual are often expressed on three levels: the level of internal individuals (personality, thinking habits ...); interpersonal level (communication, behavior, ability to influence ...) and the level of expression of its activities and products (work results). 2.2.2. Some basic attributes of CEO personal characteristics According to Pham Minh Hac (1999), the individual characteristics of each person are governed by four basic attributes: stability, unity, activeness and interpersonal characteristics. At the same time, the CEO's personal characteristics also carry all the basic attributes of the personal trait. This system of characteristics influences and influences the handling habits and styles, resolves situations arising at work, thereby affecting work efficiency and problem solving. 2.2.3. Approaches to the CEO's personal characteristics Although there are many different approaches, it can be basically divided into two main groups: - Group 1 is demographic characteristics such as age, nationality, gender, hometown, living culture, etc. These characteristics are basic, have direct and fundamental influence on CEO behavior and affect cognitive ability, thinking, work capacity ... - Group 2 is the work characteristics such as industry, business area, seniority, management experience, share ownership rate, part-time rights. These characteristics are often greatly influenced by objective factors, external environment, allowing explanation to explain the unique characteristics of the CEO in each industry or sector in which they participate. 2.3. Listed family-owned enterprises and the role of listed family-owned enterprises in economic development 2.3.1. Overview on family-owned enterprises Family-owned enterprise is one of the earliest economic organizations of human society, and has made many positive contributions to the development of economies around the world. From the governance perspective, there are many advantages of Family-owned company in terms of organizational, strategic or decision-making features over other private or state-owned enterprises. The strength of the family-owned company is the cooperation between the key members. However, when family ownership of the family-owned enterprise is passed down through the generations, the heirs must share the ownership of the company in a partnership. They must together decide how to manage and run the family-owned enterprise as a common property, and that's when corporate governance issues arise. The vast majority of family-owned enterprise have difficulty in dealing with this management issue. (Ward, 1988). With many outstanding and unique advantages, the question of whether or not an enterprise is a family-owned enterprise is still a top concern of researchers (Peter, 2005). At present, there are still many different definitions of family-owned enterprise depending on different conditions such as culture, legal environment, religion, production and business activities. Different ways of defining with different criteria will influence the behavior and performance of the business. 2.3.2. Overview concept of family-owned enterprise Based on the review of the definition of FOEs in countries around the world and the summary of researchers' approaches, derived from the practical necessity of establishing an appropriate definition of family-owned enterprise based on practical conditions in Vietnam. Summarizing the research results, in order to give a complete definition of Foes according to the subjective view of the thesis, it is necessary to clarify FOEs in two aspects: Quantitative: The number of family members founding and participating in corporate governance activities and the percentage of ownership control of family members. In terms of the number of family members, most definitions determine that more than one family member is involved in the business, on the company's board of directors, and is usually the founding member of an enterprise. (Villalonga and Amit (2006), Rutherford et al (2008). In qualitative terms: FOEs reflects the relationship between family members, which is governed by the family's strategic direction as well as the power - culture - experience element of the leadership team. 2.3.3. The role of listed family-owned enterprises The FOEs model in the development of the economy play an important role and has strong influence on the performance of the whole economy. 2.4. Performance of listed family companies Operational efficiency is a complex issue involving factors in the course of business operations. The performance of listed family companies is similar to that of businesses which is generally verified and reflected by financial results (financial results), including: criteria for profitability and profitability which reflects market value. 2.5. The impacts of CEO personal characteristics on the performance of listed family owned enterprises Research on the impacts of the CEO on the performance of an enterprise is not only restricted to the power but also is shown in a number of characteristics such as the age of the CEO (Cheng et al, 2010); Srivivasan and Li 2011); ownership percentage of stock held (Coles et al., 2012; Lilienfeld-Total and Ruenzi, 2014); educational level (Joh and Jung, 2016), gender (Shinghathep and Pholphirul, 2015; Ho et al., 2015) ... It can be seen that studies on the relationship between CEO characteristics and brand performance is quite diverse, but there is still no concrete and joint conclusion. CHAPTER 3: RESEARCH METHODS 3.1. Development of research hypotheses and proposed research variables 3.2.1. Research hypotheses: The system of 9 research hypotheses includes: - 6 research hypotheses that reflect the influence of CEO's demographic characteristics on firm performance H1: CEO's age has a positive relationship to the performance of the business. H2: CEO education has a positive relationship to the performance of the business. H3: Law degree of CEO is positively related to the performance of the business. H4: Female-CEO CEO has a positive influence on the performance of the business. H5: The relationship between the CEO's hometown and the performance of the business .. H6: The seniority of working in the state environment of the CEO has a positive relationship to the performance of the business. - 3 research hypotheses that reflect the impact of CEO's performance on firm performance H7: CEO duality is positively related to the performance of the business. H8: The share of CEO shares has a positive relationship to the performance of the business. H9: The change in personnel position of CEO has a positive relationship to the performance of the business And the cross-correlation effects between the seniority characteristics and the demographic characteristics of the CEO 3.1.2. The proposed research variables. In order to orient the factors that belong to the CEO's individual characteristics that may affect the performance of family-owned companies listed on Vietnam's stock market, the thesis has summarized and inherited. The research results performed in the world on the influence of CEO's individual characteristics on the performance of enterprises on that basis, selecting and selecting 02 characteristics groups of CEOs to study are: (1) demographic characteristics include AGE, GENDER, EDU, LAW, QQ, STATE; (2) characteristics of seniority / working process: OWNERSHARE, KIEMNHIEM, CHANGE. Regarding the dependent variable, the performance of the enterprise has many different ways / methods of measurement, but from the viewpoint of this thesis, the author chooses to measure the performance of the enterprise through the results. Financial results, particularly the group of indicators that reflect the bookkeeping value (ROA, ROE). To ensure the rigor of the research model, through a preliminary discussion and consultation with a number of experts, the control variables reflect the characteristics of the company: company size is measured by total assets. of the enterprise (SIZE) and the growth rate of the business (GROWTH) 3.2. Research data The sample included all family owned enterprises listed on the HCMC stock exchange. Ho Chi Minh City (HOSE) and Hanoi (HNX). The thesis uses 02 primary and secondary data sources simultaneously for the research. With secondary data, the thesis accesses information sources from two types of reports: Annual Report (Annual Report) and Financial Report (Financial Report). With primary data, the thesis collects data in the form of in-depth interviews with a sample size of 10 to investigate and verify the analytical results of the quantitative analysis model. 3.3. Research Methods 3.3.1. Qualitative research methods The in-depth interview method is a qualitative research technique conducted by in-depth individual interviews with a small number of respondents to assess their perspective on an issue, program or specific situations (Boyce and Neale, 2006). The thesis conducted interviews with 10 experts including 07 experts who are business executives (including family companies and ordinary companies); 03 experts are researchers on the same topic at universities and research institutes. The results of the thesis and expert interviews are the basis for the author to make some recommendations and recommendations in chapter 5. 3.3.2. Methods of analysis and processing of research data The research model was formed on the basis of an overview of domestic and foreign literature review combined with the identification of operating characteristics of family-owned enterprises to show the relationship between personal characteristics of CEOs. to the performance of the business. The regression equation for the author's research is as follows: CHAPTER 4: ANALYSIS OF THE THE IMPACTS OF CEO’S CHARACTERISTICS ON THE PERFORMANCE OF A NUMBER OF OUTSTANDING LISTED ENTERPRISES IN THE PERIOD 2012 - 2018 4.1. Status quo of listed family-owned enterprises and the status quo of corporate governance in listed family-owned enterprises 4.1.1. Status quo of listed family-owned enterprises in Vietnam Based on the classification criteria of FOEs that the thesis approached, currently in Vietnam there are a total of 57 FOEs listed on the HOSE and HNX, the above enterprises contribute about half of the total listed value. of the whole market. By business sector, FOEs in Vietnam currently operates in 7 key sectors and industries including basic materials, industry, consumer goods, health care, infrastructure services, finance and technology (according to the ICB industry standard - StockPlus). FOE’s structure by sectors involved No. Sector Number of enterprises 1 Finance 18 2 Consumer goods 16 3 Industry 9 4 Basic materials 8 5 Infrastructure services 3 6 Technology 1 7 Healthcare 1 TOTAl 57 4.1.2. Some issues raised in corporate governance of family-owned enterprises in Vietnam Include 03 typical content: - Composition and structure of the BOD in family-owned enterprises in Vietnam is not effective - Succession issue and transfer plan between generations in the family-owned enterprises. - The lack of professionalism in business activities in the family-owned enterprises. 4.2. Description of research sample Preliminary description of the characteristics of the sample Variable Number of observation objects Average Standard deviation Min. Max. ROA 399 0.062 0.052 0.000 0.176 ROE 399 0.125 0.096 0.000 0.333 AGE 399 49.886 7.359 27.000 66.000 OwnerShare 399 0.137 0.150 0.000 0.612 GROWTH 399 0.141 0.242 -0.819 1.316 TTS 399 12.4 37.7 14.2 32.9 In addition, due to the characteristics of qualitative variables, there is not much meaning in the average, maximum and minimum values. The thesis will use the method of calculating frequency over years to analyze variables on characteristics of CEO's personalities without counting statistical indicators such as quantitative variables. 4.3. Results of regression analysis 4.3.1. Analysis results for ROA The results of the data analysis show the influence of the CEO's personal characteristics on the ratio of profit to total assets (ROA). In which: CEO's age has a positive relationship to enterprise performance - confirming the H1 hypothesis; CEO's education, Law degree, gender do not have much influence and opposite effect on ROA - negate hypotheses H2, H3 and H4; The hometown of CEO and seniority working in state agencies is really related to the performance of the business - confirming the hypothesis H5 and H6. In the group of working characteristics: variable KIEMNHIEM has no impact on ROA, variable OWNERSHARE has impact (-) on ROA, and CHANGE variable has (+) impact on ROA. 4.3.2. Analysis results for ROE The results of the data analysis show the influence of the CEO's personal characteristics on the return on equity (ROE). In which: CEO's age has a positive relationship to firm's performance - confirming the H1 hypothesis; CEO's education, Law degree, gender do not have much influence and opposite effect on ROE - negate hypotheses H2, H3 and H4; The hypothesis of H5, H6 was reaffirmed. In the group of working characteristics: the variable KIEMNHIEM has no impact on ROE, the OWNERSHARE variable has an effect (-) on ROE, and CHANGE has an effect (+) on ROE. 4.3.3. Analysis results using variables for ROA. The combination of the OWNERSHARE variable helps to increase the influence of the majority of variables describing the demographic characteristics of the CEO, demonstrating the increase in personal benefits for the CEO during the process of running the business. available advantages of personal characteristics such as confidence, experience ... help create a positive impact on the performance of the business. In contrast, when combined with the CHANGE variable, the characteristics that describe education and expertise (EDU and LAW variables) as well as AGE variables do not work. Therefore, it can be concluded that at the current stage of FOEs, the change of CEO is often influenced by many other factors, not merely by the characteristics of the CEO. 4.3.4. Analysis results using variables for ROE. With ROE, when combined with the OWNERSHARE variable, the variables AGE, GENDER, LAW, QQ, AGE, and STATE are increased. Therefore, it can be seen that the personal characteristics of the CEO help to increase the impact on the performance of FOEs in terms of equity. At the same time, when combined with the CHANGE task description feature, the results are quite similar. From that, it can be concluded that the CEO's personal characteristics include demographic characteristics and business characteristics that directly and indirectly affect the performance of the FOEs currently listed on the stock market of Vietnam. CHAPTER 5: DISCUSSION ON THE RESEARCH RESULTS OF THE THESIS AND A NUMBER OF RECOMMENDATIONS 5.1. Discussions on the research results From the above quantitative and qualitative research findings of the thesis, some of the following conclusions can be drawn about the influence of personal characteristics of executives on the performance of listed FOEs: First, the personal characteristics of the CEO as well as the characteristics of the human being are the combination of many different characteristics, helping to form the psychological characteristics and personality of each individual, controlling the habit of problem solving, decision making, etc., thereby affecting the work results and the management efficiency which is expressed through the business performance. Second, the CEO's personal characteristics are generally a combination of two main characteristics groups (i) demographic characteristics such as gender, age, cultural awareness level, etc. (ii) working characteristics directly related to the business. Third, among t