| Variable Name | Definition |
| Skill |
|
| Education |
|
| BA | The dummy variable that equals 1 if the CEO’s highest educational degree is bachelor’s degree, and zero otherwise. |
| MBA | The dummy variable that equals 1 if the CEO’s highest educational degree is master’s degree, and zero otherwise. |
| PhD | The dummy variable that equals 1 if the CEO’s highest educational degree is PhD, and zero otherwise. |
| Professional | |
| Finance | The dummy variable that equals 1 if the CEO/director has banking, economics, or finance expertise in his or her background, and zero otherwise. |
| Accounting | The dummy variable that equals 1 if the CEO/director has accounting or auditing expertise in his or her background, and zero otherwise. |
| Governance | The dummy variable that equals 1 if the CEO/director has corporate governance expertise in his or her background, and zero otherwise. |
| Compensation | The dummy variable that equals 1 if the CEO/director has compensation and incentives expertise in his or her background, and zero otherwise. |
| Legal | The dummy variable that equals 1 if the CEO/director has governmental, policy, regulatory, or legal expertise in his or background, and zero otherwise. |
| International | The dummy variable that equals 1 if the CEO/director has international affair expertise in his background and zero otherwise. |
| Leadership | The dummy variable that equals 1 if the CEO/director is someone that has leadership, management, or communications expertise in his or her background, and zero otherwise. |
| R & D | The dummy variable that equals 1 if the CEO/director has engineering, scientific, technology, or R & D expertise in his or her background, and zero otherwise. |
| Manufacturing | The dummy variable that equals 1 if the CEO/director has manufacturing expertise in his or her background, and zero otherwise. |
| Marketing | The dummy variable that equals 1 if the CEO/director has marketing or sales expertise in his or her background, and zero otherwise. |
| Risk | The dummy variable that equals 1 if the CEO/director has risk management expertise in his or her background, and zero otherwise. |
| Strategies | The dummy variable that equals 1 if the CEO/director has strategy planning expertise in his or her background, and zero otherwise. |
| Sustainability | The dummy variable that equals 1 if the CEO/director has environmental or sustainability issues expertise in his or her background, and zero otherwise. |
| Experience |
|
| Academic | The dummy variable that equals 1 if the CEO/director is from academia, and zero otherwise. |
| Firm | The dummy variable that equals 1 if the CEO/director has worked for other companies, and zero otherwise. |
| Industry | The dummy variable that equals 1 if the CEO/director has worked in other industries, and zero otherwise. |
| Experience | The dummy variable that equals 1 if the CEO/director had held CEO position at another company, and zero otherwise. |
| Conglomerate | The dummy variable that equals 1 if the CEO/director had worked for multisegmented company, and zero otherwise. |
| Recession | The dummy variable that equals 1 if the CEO/director experienced a recession year, defined by National Bureau of Economics Research, after his or her first academic-degree graduation, and zero otherwise. |
| OutsideBoard | The dummy variable that equals 1 if the CEO/director has outside board experience, and zero otherwise. |
| OutsideExecutive | The dummy variable that equals 1 if the CEO/director was an executive of another company, and zero otherwise. |
| Entrepreneurial | The dummy variable that equals 1 if the CEO/director has entrepreneurial experience, and zero otherwise. |
| Control |
|
| Firm Characteristic |
|
| fsize | firm size is the natural logarithm of total assets. |
| lvrg | leverage is ratio of total debts including long-term debt and short-term debt to total assets. |
| tgbl | tangibility is the ratio of property, plant, and equipment plus inventories to total assets. |
| prft | profitability is the ratio of net income to total sales. |
| mbr | market to book ratio is the ratio of market value to total assets. |
| Governance Characteristic |
|
| bsize | board size is the natural logarithm of number of board directors. |
| dual | duality is a dummy variable that equals 1 if the CEO fulfills both the function as CEO and chairman of the board of directors, and 0 otherwise. |
| indp | independence is a dummy variable that equals 1 if firms have independent board in their board, and 0 otherwise. |
| inst | institutional shareholding is the ratio of the number of shares held by institutional investors to the number of shares outstanding. |
| mngr | managerial shareholding is the ratio of the number of shares held by executives to the number of shares outstanding. |
| blck | blockholder shareholding is the ratio of the number of shares held by 10 largest shareholders to the number of shares outstanding. |
| devt | deviation ratio is the ratio of voting rights to cash-flow rights. |