The investigation of the association between CEO financial expertise and financial policies in firms enlisted Tehran Stock Exchange

Subject Areas : business management

Mehraneh Behmanesh ¹ , Sedigheh Totianisfahani ² , Nilofar Mirsepasi ³

1 - Department of Financial Management, East Tehran Branch, Islamic Azad University, Tehran, Iran
2 - Department of Management, West Tehran Branch, Islamic Azad University, Tehran, Iran.
3 - Department of Management, Islamshahr Branch, Islamic Azad University, Tehran, Iran

Received: 2019-08-14 Accepted : 2019-09-22 Published : 2020-09-22

Keywords: Corporate Governance, Tehran Stock Exchange, CEO financial expertise, Financial policies,

Abstract :

The main purpose of this study is to investigate the relationship between executive financial expertise and financial policy (Including profit payments policy, financial leverage and cash flow) in listed companies in Tehran Stock Exchange Organization. The purpose of this research is in terms of correlation method and the post-event type method. Statistical sample of the study consists of 110 companies listed in Tehran Stock Exchange Organization during 2009 to 2018. This research has been used to test the hypotheses proposed by the hybrid data method and the least-squares approach. The results show that there is an inverse and significant relationship between CEO financial expertise and Profit Payment Policy. In other words, the sharing of profits in the companies whose CEO benefits from financial expertise is less. Otherwise, results of this investigation show that the relation between CEO financial expertise and cash holding is direct and significant. In this sense, managers with financial expertise hold more cash. Other findings show that there is an inverse relationship between CEO financial expertise and financial leverage but it is not significant. The result indicates that financial leverage has no significant differences with managers of global financial experts and other companies.