CEO-Board relationships in a pre and post-sox era. The effect of the board of directors in the CEO power-firm performance relationship

Our research aims to investigate the impact of CEO power on firm financial performance in a post-SOX era. We investigate the effect of board of directors on the relationship between CEO power and firm performance. This research considers board independence, directors’ incentives and board activity as potential moderators of the relationship between CEO power and firm financial performance. We tested our hypotheses using a sample of 500 large US industrial firms. Preliminary results on a cross-sectional dataset provide support for our hypotheses and indicate that CEO power has a strong positive impact on firm financial performance, and that the board of directors moderates such relationship. We are collecting additional data to build a longitudinal dataset that includes observations both pre- and post- Sarbanes Oxley Era