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http://ssrn.com/abstract=1412827
 
 

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CEO and Board Chair Roles: To Split or Not to Split


Aiyesha Dey


University of Minnesota - Carlson School of Management

Ellen Engel


University of Chicago Booth School of Business

Xiaohui Liu


University of Texas at Dallas - Department of Accounting & Information Management

December 16, 2009

Chicago Booth Research Paper No. 09-23

Abstract:     
We document that firms that are larger, have stronger governance and more able CEOs are more likely to combine CEO and board chair roles (i.e., duality). We also document that firms that split these roles have significantly lower announcement and post-announcement returns, and lower contributions of investments to shareholder wealth. This result is more pronounced for firms that split due to investor pressure, and performance outcomes are more negative for firms with higher predicted values of duality based on our economic determinants model. Our evidence suggests that recent proposals for splitting the roles for all firms warrant more careful consideration.

Number of Pages in PDF File: 53

Keywords: CEO duality; corporate governance; board chair; firm performance, investments

JEL Classification: G30, G38

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Date posted: June 1, 2009 ; Last revised: January 29, 2010

Suggested Citation

Dey, Aiyesha and Engel, Ellen and Liu, Xiaohui, CEO and Board Chair Roles: To Split or Not to Split (December 16, 2009). Chicago Booth Research Paper No. 09-23. Available at SSRN: http://ssrn.com/abstract=1412827

Contact Information

Aiyesha Dey (Contact Author)
University of Minnesota - Carlson School of Management ( email )
321 Nineteenth Avenue South
Minneapolis, MN 55455
United States
6126268626 (Phone)
Ellen Engel
University of Chicago Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-834-0966 (Phone)
866-377-52152 (Fax)
Xiaohui Liu
University of Texas at Dallas - Department of Accounting & Information Management ( email )
2601 North Floyd Road
Richardson, TX 75083-0688
United States
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