Leadership

Power Trip: CEOs And Firm Performance

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Executive Summary

Despite the public outcry over CEO pay and abuses of authority, powerful chief executives can be good for the bottom line. E. Han Kim, professor of finance at U-M's Ross School of Business, says that CEO power can enhance firm performance and enrich shareholders - as long as CEOs employ power properly. Recent evidence on CEO power suggests that, in general, powerful CEOs are bad news for shareholders. But in most corporations, the CEO position is designed to be a center of power for coordination, efficiency and organizational discipline to enhance performance.

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