Impact of Characteristics of the Board Chairman on Cash Holdings: Empirical Evidence from GCC

Purpose This paper aims to examine the impact of the characteristics of the board chairman (BC) on cash holdings (CHs). Design/methodology/approach Ordinary least squares and two-stage least squares–based methods were used on historical data from 167 firms listed on Gulf Cooperation Council Exchange Markets from the year 2012 to 2019. Findings Chairman ownership (CHOW) and the chairman and chief executive officer (CEO) from the same family (CHCESF) have a negative impact on CH, while chairman from royal families (CHRF) positively affects CH. Research limitations/implications This study was limited to only three characteristics of the BC. Additionally, this study only used linear regression. Practical implications Stakeholders show the impact of the characteristics of the BC on CH as a tool for risk management and financing investment opportunities. Simultaneously, the results help capital market authorities by outlining the importance of reconsidering the governance regulations regarding the different characteristics and roles of the BC. Originality/value This study pioneeringly clarifies the impact of three characteristics of the board’s chairman (CHOW, CHCESF and CHRF) on CH.