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Does shared tenure between board of directors and CEO affect R&D investment?

Author

Listed:
  • Alhaj-Ismail, Alaa
  • Alhababsah, Salem
  • Azzam, Ala’a

Abstract

Psychology literature suggests that shared tenure between individuals affects how they communicate and share information. Given that the relationship between board of directors and CEO involves extensive interactions and information-sharing to maintain shareholders' interests, this study seeks an answer as to whether that shared tenure between directors and CEO affects R&D investments. Using a sample of firms listed in the UK FTSE350 index between 2010 and 2019, we find that directors–CEO shared tenure positively affects R&D intensity. The study has implications for corporate governance and strategic management literature by highlighting Board–CEO shared tenure as a new factor affecting R&D investments. This study has implications for practice and policy-makers. In particular, companies that are eager to strengthen corporate governance and maintain sustained innovation might consider the shared tenure between directors and CEO.

Suggested Citation

  • Alhaj-Ismail, Alaa & Alhababsah, Salem & Azzam, Ala’a, 2025. "Does shared tenure between board of directors and CEO affect R&D investment?," International Review of Financial Analysis, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:finana:v:97:y:2025:i:c:s1057521924006197
    DOI: 10.1016/j.irfa.2024.103687
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