CEO Power and Firm Value: Affirmative Action Implications

Abstract

Objective: This research aims to reveal the critical role of CEO leadership and affirmative action policies, particularly those related to gender equality, in enhancing firm value. Research Design: This study employs a quantitative design by analyzing secondary data from the ESG Intelligence Dataset and publications of the Indonesia Stock Exchange from 2017 to 2021. Population and Sample: The population of this research comprises non-financial companies listed in the Kompas 100 Index in Indonesia. The sample was selected using a purposive sampling method, yielding 42 companies per year, resulting in a total of 210 observations. Methodology: The data were analyzed using multiple regression analysis to examine the influence of CEO power and affirmative action on firm value. Findings: The research findings indicate that CEO leadership has a positive and significant impact on firm value. Affirmative action policies related to gender equality also play a positive role in strengthening the effect of CEO leadership on firm value. Conclusion: This research provides in-depth understanding and offers an innovative perspective for companies to optimize the role of CEOs and affirmative action policies to enhance long-term firm value. The primary recommendation is that companies should consider implementing affirmative action policies, especially those related to gender equality, to help align the interests of stakeholders and improve corporate governance.