The CEO characteristics and Romanian banks performance

Abstract

The main objective of this research is to identify to what extent the characteristics of the CEO (chief executive officer) influence the financial performance of banks within the Romanian banking system. The sample under investigation includes all 21 Romanian banks, and the analyzed period included the financial years related to the last 5 financial years (2018–2022). Regarding these characteristics, aspects such as age, gender diversity, education, nationality, and duality were included in the research, the financial performance of the banking system being measured through the ROA (return on assets) and ROE (return on equity) indicators, which are often used in the literature, including control variables such as the size of the bank, assessed by the total value of bank assets, the share of debts in total assets and the share of capital in total assets. Regarding the duality of the CEO, this is the practice of the same person holding both the position of chairman of the board of directors and that of executive manager. The authors tried to find the answer to the question: Is there a correlation between CEO characteristics and the financial performance of the banks, and if the answer is yes, to what extent are these correlations significant? To carry out this research, the authors used the SPSS software, the research methodology being predominantly quantitative, including descriptive methods, correlation analyses and regression models. The results of the research indicate that the financial performance of the banks operating within the banking system in Romania (measured by the ROA and ROE indicators) is influenced by the nationality and education of the persons holding the position of CEO but also by the size of the banks, appreciated by the value of their total banking assets.