The Relationship Between CEO Power And The Growth Of Corporate

The key points of enhancing China’s overall national strength and national development strategy are to build an innovation oriented country, to increase own innovation capability and vigorously promote the construction of small and medium-sized high-tech enterprises, encourage with high added value, high growth small and medium-sized enterprise development. China’s GEM absorption is a kind of high input, high innovation, high growth of small and medium-sized high-tech enterprises, which depend on reform and renovation for the core competence construction. With main board listed companies in the pursuit of high performance and benefits to investors difference, the GEM-listed companies the most critical is continuously growing, The research on the growth of GEM-listed companies is based on a dynamic index to measure the development level and the health degree. In order to achieve a sustained, rapid and healthy development of GEM-listed companies, we need to mobilize resources, to coordinate the relationship between the stakeholders, and to breakthrough innovation resistance constantly. As the core of an enterprise management, CEO plays an important role in allocating of resources, coordinating the interests of enterprises, promoting the reform of enterprise innovation. It benefits GEM-listed Companies through the study of the relationship between the GEM-listed companies’ CEO power and the growth of enterprises.This paper is based on205observation data of GEM-listed companies from2010to2011by starting with four dimensions of CEO power of CEO’s structural power, ownership power, prestige power, and expert power. Duality of COB and CEO, the proportion of independent directors, CEO shareholding ratio, institutional ownership, the ownership of enterprises property, CEO education degree, CEO external part-time, and CEO Long tenure are regarded as eight crucial variables to measure the CEO power. Descriptive statistical analysis, multiple linear regression model and other statistical methods are applied to testify whether CEO power has an influence on the development of the growth of innovative enterprises. The results show that:(1) Duality of COB and CEO contributes to the growth of enterprise development, and the proportion of independent directors is not the key variable affecting the development of innovative companies to grow.(2) CEO ownership ratio is positively related to the enterprise growth and development, institutional ownership has moderating effect between CEO ownership and enterprise growth.(3) GEM-listed Companies’ current CEO has relatively high education level, so hiring better educated CEO is conducive to enterprise development.(4)GEM-listed Companies’ CEO long-serving is conducive to the further development of enterprises.Based on the research conclusion above, this paper suggests that:(1) GEM-listed companies should moderately increase the CEO power; duality of COB and CEO contributes to the growth of enterprise development; GEM-listed companies should also actively implement equity incentive for CEO to reduce the agency cost. Meanwhile, GEM-listed Companies should actively introduce institutional investors to monitor the power of CEO, because bad effects follow the increase of the CEO power.(2) GEM-listed companies should focus on those better educated ones in the selection of CEO. CEO with higher education have more profound knowledge reserve and a cognitive system and also have a deeper understanding of the innovative enterprise.(3)GEM-listed companies should give them some time to implement complete management ideas for the development of enterprises, to make their decisions related to execute effectively to solve the problem of a deeper within the enterprise.