| This study focused on the development of two new measures: one of board of director power and one of CEO power. The first goal was to develop a new measure of board power. While there have been many studies on the individual elements of board power, the empirical results have been inconsistent and mixed. The underlying position of this paper is that no single element adequately explains the relationship between board power and outcome variables such as firm financial performance. In this study, the new board power measure was composed of multiple elements and an index was created.;The second goal of the study was to create a new measure of CEO power. Many studies have attempted to establish the relationship between the CEO and relevant outcome variables. As mentioned above, one of the most important outcome variables is firm financial performance and as one of the central figures in the organization, the CEO is considered to have an important relationship to firm financial performance. In fact, the CEO may have the most direct role to improve and sustain the firm's financial performance. In this study, multiple elements of CEO power were combined to form a new index of CEO power.;The third goal of the study was to examine the differences of board power and CEO power by industry type, firm size, and degree of globalization. These three variables may impact the effects between the predictor variables (board of director power and CEO power) and outcome variables.;The results indicated that the board power index was comprised of board size, board member composition, non-duality, lead director, board member ownership, and large investor ownership. CEO power index was comprised of CEO tenure, CEO-board member nominations, and CEO ownership. Regarding the differences of board power and CEO power by industry type, firm size, and degree of globalization, only CEO power by firm size was significant. CEOs of smaller firms have higher levels of power than CEOs of larger firms. |
