Abstract

http://ssrn.com/abstract=686707
 
 

References (56)



 
 

Citations (3)



 


 



Does Duality Destroy Value?


Maria Carapeto


City University London - Cass Business School - Faculty of Finance

Meziane Lasfer


City University London - Sir John Cass Business School

Katerina Machera


Cass Business School - Faculty of Finance

January 12, 2005

Cass Business School Research Paper

Abstract:     
The issue of the separation of the roles of Chief Executive Officer (CEO) and Chairman of the Board (COB) has been at the centre stage of various corporate governance guidelines. While in the US, these roles are typically combined, in the UK companies are advised to split them following the guidelines of the various codes. We assess the market valuation of the decision to split/combine these roles using a sample of UK firms. We find that the decision to split (combine) the roles is greeted with significant positive (negative) abnormal returns and these abnormal returns are strongly related to various measures of agency costs. However, we do not find strong overperformance (underperformance) of companies that split (combine) the roles in the post-event period. Our results suggest that, contrary to the market's expectations, the split/combination of the roles of the CEO and the COB does not actually mitigate or exacerbate the agency conflicts.

Number of Pages in PDF File: 30

Keywords: Agency conflicts, board structure, Cadbury recommendations, combined roles of the chairman and the CEO, financial performance

JEL Classification: G34, G38

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Date posted: March 24, 2005  

Suggested Citation

Carapeto, Maria and Lasfer, Meziane and Machera, Katerina, Does Duality Destroy Value? (January 12, 2005). Cass Business School Research Paper. Available at SSRN: http://ssrn.com/abstract=686707 or http://dx.doi.org/10.2139/ssrn.686707

Contact Information

Maria Carapeto (Contact Author)
City University London - Cass Business School - Faculty of Finance ( email )
106 Bunhill Row
London, EC1Y 8TZ
United Kingdom
+44 20 7040 8773 (Phone)
+44 20 7040 8881 (Fax)
Meziane Lasfer
City University London - Sir John Cass Business School ( email )
106 Bunhill Row
London, EC1Y 8TZ
Great Britain
+44 20 7040 8634 (Phone)
+44 20 7040 8881 (Fax)
HOME PAGE: http://www.cass.city.ac.uk/faculty/m.a.lasfer/
Katerina Machera
Cass Business School - Faculty of Finance ( email )
London, EC2Y 8HB
Great Britain
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References:  56
Citations:  3

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