CEO Power and Firm Value: Affirmative Action Implications

Wahyu Wijayanto *

Department of Management, Faculty of Economics and Business, Universitas Tanjungpura, Pontianak, Indonesia.


Department of Management, Faculty of Economics and Business, Universitas Tanjungpura, Pontianak, Indonesia.


Department of Management, Faculty of Economics and Business, Universitas Tanjungpura, Pontianak, Indonesia.

Helma Malini

Department of Management, Faculty of Economics and Business, Universitas Tanjungpura, Pontianak, Indonesia.

*Author to whom correspondence should be addressed.


Objective: This research aims to reveal the critical role of CEO leadership and affirmative action policies, particularly those related to gender equality, in enhancing firm value.

Research Design: This study employs a quantitative design by analyzing secondary data from the ESG Intelligence Dataset and publications of the Indonesia Stock Exchange from 2017 to 2021.

Population and Sample: The population of this research comprises non-financial companies listed in the Kompas 100 Index in Indonesia. The sample was selected using a purposive sampling method, yielding 42 companies per year, resulting in a total of 210 observations.

Methodology: The data were analyzed using multiple regression analysis to examine the influence of CEO power and affirmative action on firm value.

Findings: The research findings indicate that CEO leadership has a positive and significant impact on firm value. Affirmative action policies related to gender equality also play a positive role in strengthening the effect of CEO leadership on firm value.

Conclusion: This research provides in-depth understanding and offers an innovative perspective for companies to optimize the role of CEOs and affirmative action policies to enhance long-term firm value. The primary recommendation is that companies should consider implementing affirmative action policies, especially those related to gender equality, to help align the interests of stakeholders and improve corporate governance.

Keywords: CEO power, affirmative action, firm value

How to Cite

Wijayanto, Wahyu, Giriati, Wendy, and Helma Malini. 2024. “CEO Power and Firm Value: Affirmative Action Implications”. Asian Journal of Economics, Business and Accounting 24 (6):552-60.


Download data is not yet available.


Hirdinis. Capital structure and firm size on firm value moderated by profitability. International Journal of Economics and Business Administration. 2019;7(1).

Ugbah AA, Amahi FU, Offor, Nkechi T. Derivative Risk Information Disclosure Effect on Financial Reporting Quality Evidence from Selected Listed Deposit Money Banks in Nigeria . J. Econ. Manage. Trade. 2023;29(11):1-11.


[Accessed on 2024 Jun. 2].

Chiu J, Chen CH, Cheng CC, Hung SC. Knowledge capital, CEO power, and firm value: Evidence from the IT industry. The North American Journal of Economics and Finance. 2021;55:101012.

Indah Ayu Mardiana, Wuryani, E. Pengaruh kinerja lingkungan terhadap nilai perusahaan dengan profitabilitas sebagai variabel pemoderasi. Jurnal Akuntansi Unesa. 2019;8(1).

Finkelstein S, Hambrick DC, Cannella AA. Strategic leadership: Theory and research on executives, top management teams, and boards. Oxford University Press; 2009.

Ampofo A, Connecticut Uo, Barkhi R, University VPIS. The Impact of CEO Power and Ethical Corporate Citizenship on Firms’ Outcomes. SSRN; 2022.

Aguilera RV, Crespi-Cladera R. Global corporate governance: On the relevance of firms’ ownership structure. Journal of World Business. 2016;51(1):50-57.

Gonçalves TC, Gaio C, Rodrigues, M. The Impact of Women Power on Firm Value. Administrative Sciences. 2022;12(3). Available:

Brahmana RK, You HW, Kontesa M. Does CEO power matter for the performance of retrenchment strategy? Journal of Strategy and Management. 2020;14(1):1-18. Available:

Sheikh S. CEO power, product market competition and firm value. Research in International Business and Finance. 2018;46:373-386. Available:

Brodmann J, Hossain A, Singhvi M. Chief executive officer power and board gender diversity. Finance Research Letters. 2022;44. Available:

Javeed SA, Ong TS, Latief R, Muhamad H, So WN. Conceptualizing the moderating role of ceo power and ownership concentration in the relationship between audit committee and firm performance: Empirical evidence from Pakistan. Sustainability. 2021;13(11). Available:

Velte P. Does CEO power moderate the link between ESG performance and financial performance? Management Research Review. 2019;43(5):497-520. Available:

Chiu J, Chen CH, Cheng CC, Hung SC. Knowledge capital, CEO power, and firm value: Evidence from the IT industry. The North American Journal of Economics and Finance. 2021;55.


Dawson A, Paeglis I, Basu N. Founder teams and firm value in young public firms: An analysis of the moderating effect of founders' ownership power and team size. Corporate Governance: An International Review. 2021;30(2):232-251. Available:

Hamidlal KE, Harymawan I. Relationship between CEO power and firm value: Evidence from Indonesian non-financial companies. Jurnal Dinamika Akuntansi dan Bisnis. 2021;8(1):15-26.

Ikbal Lutfian Habrim Suyanto, Puspawati D. The Effect of financial performance and women power on firm value in manufacturing companies listed on the indonesia stock exchange period 2019-2021. Educational Journal of History and Humanities; 2023. Available:

Arvanitis SE, Varouchas EG, Agiomirgianakis GM. Does board gender diversity really improve firm performance? Evidence from Greek Listed Firms. Journal of Risk and Financial Management. 2022;15(7).


Marquez-Cardenas V, Gonzalez-Ruiz JD, Duque-Grisales E. Board gender diversity and firm performance: Evidence from Latin America. Journal of Sustainable Finance & Investment. 2022;12(3):785-808.


Naghavi N, Pahlevan Sharif S, Iqbal Hussain HB. The role of national culture in the impact of board gender diversity on firm performance: Evidence from a multi-country study. Equality, Diversity and Inclusion: An International Journal. 2021; 40(5):631-650. Available:

Saleh MWA, Zaid MAA, Shurafa R, Maigoshi ZS, Mansour M, Zaid A. Does board gender enhance Palestinian firm performance? The moderating role of corporate social responsibility. Corporate Governance: The International Journal of Business in Society. 2021;21(4):685-701. Available:

Etikan I. Comparison of convenience sampling and purposive sampling. American Journal of Theoretical and Applied Statistics. 2016;5(1). Available:

Modigliani F, Miller MH. Corporate income taxes and the cost of capital: a correction. The American economic review. 1963;433-443.

Chang YJ, Lee BH. The impact of ESG activities on firm value: Multi-Level Analysis of Industrial Characteristics. Sustainability. 2022;14(21). Available:

Bedford A, Ghannam S, Grosse M, Ma N. CEO power and the strategic selection of accounting financial expertsto the audit committee. Contemporary Accounting Research; 2023. Available:

Brodmann J, Hossain A, Masum AA, Singhvi M. Chief Executive Officer power and Corporate Sexual Orientation Equality. Journal of Behavioral and Experimental Finance. 2021;31. Available:

Chu HL, Liu NY, Chiu SC. CEO power and CSR: the moderating role of CEO characteristics. China Accounting and Finance Review. 2022;25(1):101-121. Available:

Breuer W, Hass M, Rosenbach DJ. The impact of CEO power and institutional discretion on CSR investment. Review of Financial Economics. 2021;40(1):20- 43. Available:

Miller C. The Persistent Effect of Temporary Affirmative Action. American Economic Journal: Applied Economics. 2017;9(3), 152-190. Available:

Ntim CG. Corporate Governance, Affirmative Action and Firm Value in Post‐apartheid South Africa: A Simultaneous Equation Approach. African Development Review. 2013;25(2):

Ntim CG, Opong KK, Danbolt J. Corporate governance, affirmative action and firm value: evidence from post apartheid south african firms. Affirmative action and firm value: Evidence from Post-Apartheid South African Firms; 2010.

Yasin AM. Affirmative action for women in higher education and the civil service: The case of Ethiopia; 2013.

Jensen MC, Meckling WH. Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics. 1976;3(4):305- 360.

Weisbach M. Outside directors and CEO turnover. Journal of Financial Economics.1988;20.

Donaldson L, Davis JH. Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns. Australian Journal of Management. 2016; 16(1):49-64. Available:

Quigley TJ, Hambrick DC. Has the CEO effect increased in recent decades? A new explanation for the great rise in America's attention to corporate leaders. Strategic Management Journal. 2014;36(6): 821-830.


Koo K. The Effects of CEO Power on Firm Value: Evidence from the Financial Crisis of 2008. Accounting and Finance Research. 2015;4(4). Available:

Ullah I, Fang H, Jebran K. Do gender diversity and CEO gender enhance firm’s value? Evidence from an emerging economy. Corporate Governance: The International Journal of Business in Society. 2019;20(1):44-66.