A candidate for a CEO must have several skills skill such as cognitive skills, interpersonal skills, transparency and execution skills and the capabilities of seizing given opportunities. Subsequent performance of the CEO is based on execution skills and abilities. Further, the CEO’s abilities are essentially very important for enhancing the value of the firm and its success. It has been noted that “in any well-run company that is conscientious about grooming its managers in the top job are similar in their education, skills, and psychology so that they are virtually interchangeable. All that matters is that someone is in charge.”
Experts contend that “management personnel can establish themselves by making manager-specific investments which make it difficult for shareholders to replace them”. They also argue that “CEO’s can easily impress their boards and essentially negotiate their own remuneration and benefits. Remunerations and benefits are the determining factors to acquire more managerial powers as compared to their inherent capabilities. In any financial crisis, many financial institutions, especially banks have analyzed that an increase in salary and benefits should correspond to the CEOs productivity and efficiency, or determine whether he is only rent extraction
The major problem is that the board of directors does not fill the position of the C.E.O randomly. Segregating CEO characteristics is sometimes quite difficult due to the nature of the organization which was determined by a purely cross-sectional study. This offers the best opportunity for the Board of Directors to analyze the productivity and efficiency of organizations after a change in the C.E.O of the organization. Different theorists give evidence that CEOs have varied ability and skill to increase productivity and efficiency of the organizations. Empirical literature also indicates that heterogeneity talent, ability, and skill are essential for efficient actions and performance emphasized those explicit CEOs matters should be addressed for the future success of organizations.
Sill there is a lot to be learned for understanding the scrupulous individuality as well as abilities of CEO and overall corporate governance and performance. The aim of this article is to understand the most important abilities and characteristics for a CEO which will add value to the overall success of the organization in the light of which CEO characteristics and abilities will be judged. The Current study is an important contribution for enhancing the nature and knowledge regarding the appointment of CEOs in both academic research and as business practitioners. Analysts investigated that “If CEO remuneration and benefits and good performance reflect the CEO’s ability, and then the financial market’s reaction to the departure of the CEO should be measured according to the pay scale and performance prior to departure.