Understanding company performance and improving it has always been a focus, regardless of time and circumstances. One of the ways in which it can be influenced is through the ability of managers to [2]. Previous research has shown that managers who have better ability not only take the initiative to adjust their strategies in companies to the changing environment but also take innovative steps to increase their resources for the long-term survival of companies. It is believed [3] that companies can increase their productivity by using skilled human resources to achieve competitive advantages and sustainable success in the market.

They showed that human capital plays an important role in achieving sustainable performance, especially in emerging markets. Because the ability of managers is the ability to effectively allocate resources to achieve their target profit and create value, the efficiency of managers compared to competitors in converting company resources into income can be defined as managerial ability [1]. Good managers will make the best use of the company's scarce resources in a challenging environment, drawing on their professional and academic knowledge [3].

Therefore, the skills of managers can be considered an effective factor in the value and performance of the company, which has caused the role of managers to be paid more attention, and the results of the research [4] confirm this issue. Based on the resource-based perspective, which is one of the most widely used theories to explain the differences in performance and results of organisations, the role of managers is highly emphasized. The ability of managers to identify and effectively use the resources of the organisation can be seen as a valuable resource that enables a company to achieve a sustainable competitive advantage. Managers differ in their ability to manage resources and coordinate management processes to improve organisational performance. Despite this extensive literature, little is known about the role of Managerial Ability (MA) in shaping firm performance, perhaps because MA is latent and, therefore, not easily measured [5]. However, quantifying the efficiency and ability of pre-service managers [1] has been a challenging task, and some of the reasons for this are visible managerial skills (such as education, experience, etc.) and invisible (such as emotional intelligence, cognitive, etc.) [3].

A number of researchers believe that different characteristics of managers (e.g. educational background, psychological characteristics and the ability of the CEO) can have different effects on the performance of the company [6]. Based on this, the ability of managers is one of the main components of success in innovation decisions and has a positive relationship with the company's market value [7]. One of the factors that lead to the company's financial constraints is the company's poor financial performance, which may cause foreign investors and creditors to worry about the company's future repayment capacity [8]. In addition, high ability managers are a key factor in the current activities of companies.

Such companies usually face difficulties in obtaining bank loans [9], [10]. Since top managers can take advantage of more favourable investment opportunities [11] and earn more economic profit [6], firms with higher MA are better able to convince their creditors and investors of the validity and efficiency of the use of financial resources [8]. In other words, one of the ways in which top managers improve their company's financial position is by increasing the company's profitability and performance .

In the present study, Model (1) was used to test the study hypotheses:

The directors of the company are the people who are elected by the shareholders and have the necessary expertise to assume the trust of the shareholders in the management and administration of the company effectively and efficiently. Managers are also responsible for making decisions that if they can add value to the company, the company will progress and perform well.

This is consistent with the stakeholder theory that companies should be able to fulfil the dual role of fulfilling the company's own needs by performing day-to-day operational activities and should be able to meet the needs of stakeholders who also contribute to the company's success [12], [13]. The existing management and economics literature often recognizes the important role of managers in shaping firm performance (e.g., [14]. In particular, the top tier theory developed by [15], [16] has pointed out that an effective management team mainly drives the success of any company. The ability of managers indicates the ability to effectively allocate resources (i.e. human resources and capital) to pursue profit and value creation of managers [5]. Managers who are competent in running the company's operations can improve the company's performance so that the company's performance looks good in the eyes of investors and other stakeholders of the company [12]. The ability of managers to create, develop and achieve success in the company is important as measured by productivity, investment decisions, service compensation and overall company performance. The literature shows that manager-specific characteristics, such as ability, skills, and talent, affect firm performance [1]. They found that managers with better ability take innovative initiatives and actions to use company resources for long-term financial sustainability.

In addition, they found that the personality traits and competencies of a manager lead to the optimal use of resources. High-ability managers are receptive to risk-taking, which is associated with increased corporate value [17].

The results of the research showed that more capable managers significantly increase the company's performance, while managers with lower ability significantly decrease the company's performance. Their findings have been true based on the accounting and market performance criteria of the company. In general, it can be said that capable managers increase the value of the company, and its effects are stronger in companies with financial constraints.

[18] It shows that management ability is the determining factor of accounting transparency and reporting quality of a company. [19] It also shows that companies that are managed more skillfully perform better. [20] They point out that the company's investment is influenced by both the managerial quality and the reputation of the managers. [12] Obtaining management ability has a significant effect on the company's performance, and profit management has a direct effect on it. Research results [4] showed that MA significantly affects company performance. Specifically, high-ability CEOs are associated with positive performance.

As of [21], It was found that CEOs with high management abilities are able to identify threats, opportunities and competitive advantages. They [22] found that the ability of managers, especially internal CEOs with foreign work or academic experience, has the most positive relationship with Qotubin's performance index. They also found that local CEOs contribute to firm performance only if they do not have family ties to the firm. Finally, the findings show that the presence of foreign CEOs improves firm performance.

According to the results of the hypothesis testing of this research, the following suggestions can be made: The shareholders and members of the board of directors of companies, whose role is very important in the selection of managers, are suggested to act very carefully in the selection of senior managers, especially the CEO. The results of the research showed that capable managers can improve the performance of companies and remove financial restrictions by reducing information asymmetry between the company and creditors. It is also suggested to the researchers to measure the effects of other variables, such as political connection and corporate governance, on the relationship between the ability of managers and the performance of companies in future research.

Mohsen Imeni led the research design and analysis. Bahareh Faezi contributed to the methodology and literature review. Aida Bagherzadeh handled data collection and statistical analysis.

No external funding was received for this study.

Data are available from the corresponding author upon request.

The authors declare no conflicts of interest.

The authors thank all contributors to this research.