CEO Duality and Corporate Stewardship: Evidence from Takeovers

19 Pages Posted: 12 Jun 2015 Last revised: 30 Jun 2015

Date Written: June 29, 2015


Many scholars have been quick to criticize the merits of CEO duality, a situation where a company's Chief Executive Officer is also the Chairman of the Board, by claiming that CEO duality undermines the board's ability to effectively monitor and constrain self-interested CEOs. These criticisms are often based on empirical studies that use firm outcomes — aggregate performance measures — as proxies to evaluate the merits of an incentive structure such as duality on the behavior of CEOs. In this paper, I construct a more direct measure of CEO behavior by gathering information submitted by companies to the Securities and Exchange Commission. The novel variable I introduce in this paper measures how aggressively a CEO whose company is being sold negotiates with a prospective buyer during the pre-announcement sale process. I find that dual CEOs act in the interest of their shareholders by bargaining 16.1% more aggressively in takeover negotiations than do single role CEOs. The paper’s main finding is consistent with the view that top managers, when given higher levels of responsibility, act as good corporate stewards on behalf of their respective firms and shareholders.

Keywords: CEO duality, mergers and acquisitions, M&A, value maximization, corporate governance, negotiations, stewardship theory, agency theory

JEL Classification: C18, D22, G34, G38

Suggested Citation

Ghazal, Victor, CEO Duality and Corporate Stewardship: Evidence from Takeovers (June 29, 2015). Available at SSRN: or

Victor Ghazal (Contact Author)

Grinnell College ( email )

1121 Park Street
Grinnell, IA 50112
United States

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