CEO characteristics and IR4.0 adoption

Abstract

This study investigates the impacts of CEO personal characteristics on the IR4.0 adoption of 954 publicly listed companies in Bursa Malaysia in 2019. Logistic regression analysis is employed to assess the determinants of the IR4.0 adoption. This study contributes to the literature related to the risk preference of CEOs and proxy of IR4.0 adoption from several dimensions, including the profile of key personnel, technology suppliers, Chief Information Officer and Technology Committee. This study found that elder CEOs are unlikely to invest in IR4.0 technologies due to their risk-averse behaviours. Moreover, CEOs are unlikely to pursue more risk-taking activities if they also hold board chairs. The agency theory explains that weak monitoring of the board reduces the performance expectation of CEOs, and hence, CEOs prefer to be prudent to protect their status. However, CEO with foreign tertiary education experience is more likely to adopt IR4.0 technology because they have more global knowledge, broader perspectives, and a more receptive attitude to risks and innovative solutions. Lastly, it is found that female CEO tends to be more prudent in firm with fewer directors due to lower complexity and relatively narrower scope of operations.