| Bank holding companies play a significant role in the economies, and banking customers expect bank CEOs to make discretionary but well-informed judgments in the process of executing their leadership roles under all economic conditions. The success of a business organization depends on the brainpower of its CEO. Bank CEOs make decisions in the interest of the board of directors, employees, and customers. Profitability is an important performance indicator to every business, especially in periods of economic uncertainty. This study is an empirical examination of the relationship between CEO demographic characteristics and firm performance in times of financial instability. The problem is that managers responsible for selecting bank CEOs lack timely and essential information regarding the human capital characteristics of the CEO that predict profit margins of U.S. banks during periods spanning a financial crisis. The purpose of this quantitative, correlational study was to understand how level of formal education, type of degree, professional training certifications, years of work experience (including prior tenure as a senior executive in a financial institution, and current tenure as a bank CEO), and age of U.S. bank CEOs predicted firm performance measured with the 5-year average annual net profit margins of U.S. banks for 2007 through 2011, a period spanning a financial crisis. There were 153 cases representing bank CEOs in this study. The findings indicate that the multiple regression model was not statistically significant, R2 =.02, adjusted R2 = -.01, F(5, 144) = 0.62, p = .68; therefore, none of the independent variables in the model predicted firm performance, either individually or as a group.;Recommendations include future researchers use additional variables in statistical models to evaluate predictors of firm financial performance. Additionally, researchers are advised to conduct similar studies using larger sample sizes. Board of directors, human resource managers, and executive recruitment agencies should look beyond demographic characteristics of candidates for CEO position in U.S. financial institutions. The use of a multidimensional model for measuring firm performance is also recommended. |
