Does CEO power moderate the relationship between board leadership and strategy involvement in private firms? Evidence from Kenya

Abstract

Purpose The purpose of this paper is to determine how board leadership affects the board strategic involvement in private firms in Kenya and how CEO power moderates this relationship. Design/methodology/approach The authors used a Kenyan data set to investigate what makes boards in private firms get involved in strategy. Survey data derived from a sample of 186 CEOs of private firms were used, and the hypotheses were tested using moderated regression analysis. Findings The results indicate that board members’ knowledge, board chairman’s leadership efficacy, board members’ personal motivation and board members’ background all have a positive and significant effect on board strategy involvement. The authors also found that CEO power moderates the relationship between board leadership and strategy involvement. The study concludes that when the CEO wields immense power, the board tends to become passive and to submit to the direction of the CEO. Originality/value The study adds value to the understanding of the effect of the board leadership on strategic involvement in private firms and how CEO power influences this relationship, particularly in a developing country like Kenya.