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http://ssrn.com/abstract=1759477
 
 

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It Takes Two: The Incidence and Effectiveness of Co-CEOs


Matteo P. Arena


Marquette University

Stephen P. Ferris


University of Missouri at Columbia - Department of Finance

Emre Unlu


University of Nebraska at Lincoln


Financial Review, Forthcoming

Abstract:     
This study examines the phenomenon of co-CEOs within publicly traded firms. Although shared executive leadership is not widespread, it occurs within some very prominent firms. We find that co-CEOs generally complement each other in terms of educational background or executive responsibilities. Our results show that firms most likely to appoint co-CEOs have lower leverage, a more limited firm focus, less independent board structure, fewer advising directors, lower institutional ownership and greater levels of merger activity. The governance structure of co-CEO firms suggest that co-CEOships can serve as an alternative governance mechanism, with co-CEO mutual monitoring substituting for board or external monitoring and co-CEO complementary skills substituting for board advising. An event study indicates that the market reacts positively to appointments of co-CEOs while a propensity score analysis shows that the presence of co-CEOs increases firm valuation.

Number of Pages in PDF File: 44

Keywords: CEOs, Shared Leadership, Co-CEOs, Corporate Governance

JEL Classification: G3, G34

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Date posted: February 12, 2011 ; Last revised: February 16, 2011

Suggested Citation

Arena, Matteo P. and Ferris, Stephen P. and Unlu, Emre, It Takes Two: The Incidence and Effectiveness of Co-CEOs. Financial Review, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1759477

Contact Information

Matteo P. Arena (Contact Author)
Marquette University ( email )
College of Business Administration
P.O. Box 1881
Milwaukee, WI 53201-1881
United States
Stephen P. Ferris
University of Missouri at Columbia - Department of Finance ( email )
214 Middlebush Hall
Columbia, MO 65211
United States
573-882-6272 (Phone)
573-884-6296 (Fax)
Emre Unlu
University of Nebraska at Lincoln ( email )
Lincoln, NE 68588
United States
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