Is an investor interested in the same performance factors as a manager? Which variables
best serve the objectives and the interests of the investor as well as of the manager?
Realizing whetherthese differences actually exist is our primary objective.
According to Hunjra et al. (2020), the variables of social responsibility and corporate
governance can play a preponderantrole in the variation of stock prices (a measure that can
be used as a measure of business performance). Considering the Portuguese market, Vieira
et al. (2019) also show that speciﬁccorporate governance and macroeconomic characteristics
can inﬂuence the performanceof companies, concluding that the sign and signiﬁcance of the
variables can vary dependingon the dependent variable used.
Given the growing interestin this topic, primarily due to the need of companies to adjust
to new social and environmental impositions,we propose to analyze the impact that certain
factors, speciﬁc characteristics of companies, corporate governance and macroeconomic
factors have on the performance of Portuguese companies. To achieve this aim, we have
used three distinct performance variables, one based on accounting data and the others
based on market data. Our results suggest that return on assets (ROA) is a management
variable par excellence and that its determinants are those to which the manager gives more
importance. Regardingthe two market variables, the results interestingly suggestthat while
the Tobin’s Q can be understood as a variable of interest to potential long-term investors,
concerned with the future company’s growth, the stock return is a variable of interest to
investors who are already in the market. Speciﬁcally, the results suggest that a potential
investor is conﬁdent in the leadership power of the chief executive ofﬁce (CEO) and the
members of the Board of Directors. The nonlinear relationship between company age and
growth opportunities (Tobin’s Q) shows that, until reaching cruising speed, potential
investors considerthat age negatively inﬂuences the growth opportunities.
The manager, internal to the organization, is much more concerned with the amount of
interests and capital amortization that debt may imply, as this can compromise the
company’sproﬁtability. In addition, the manager believes in reinforcing the CEO’s
leadership when he/she is also Chairman, and that this will help him to make the best
decisions to improve performance. On the other hand, the current investor, interested in
stock return as a performance measure, is convinced that this duality only creates
uneasiness in the company becausethe CEO can decide much more in terms of the long-term
as Chairman than intending to improve the company’s value on the market, year by year.
This nature of investors is still concerned with social well-being and believes that more
beneﬁts to employees bringmore motivation and better performance levels.
The main contributions of this work are the following: ﬁrst, we emphasize that the
performance measurement variablemust be chosen considering the preferences of different
stakeholders; second, we analyze performance in three distinct perspectives; third, we
consider a bank-basedsystem country, which requires research; fourth, it is noted thatROA,
as an accounting and managementvariable, is of fundamental interest to those who manage
the company internally. The fact that ROA seems a better measure of performance can be
associated with the fact that we are considering a country whose capital market is not a
developed one. Finally, the difference between external, current and potential investors is
clearly perceived when using the stock return versus Tobin’s Q variables. In this way, we
believe that this work can be appreciated not only by managers and investors but also by
academics or civil society.
This paper is structured as follows: Section 2 presents the literature review and
formulates the hypotheses to be tested. Section 3 presents the research design, describing
the sample, models and estimation method.In Section 4, the main results are presented and