Corporate Leadership Structure: On the Separation of the Positions of CEO and Chairman of the Board

Posted: 6 Aug 1999

See all articles by James A. Brickley

James A. Brickley

University of Rochester - Simon Business School

Jeffrey L. Coles

University of Utah - Department of Finance

Gregg A. Jarrell

University of Rochester - Simon School

Abstract

Shareholders activists and regulators are pressuring U.S. firms to separate the titles of CEO and Chairman of the Board. They argue that separating the titles will reduce agency costs in corporations as well as potentials benefits. Our empirical evidence provides preliminary support for the hypothesis that the costs of separation are larger than the benefits for most firms. Our results also call into question previous empirical work which suggests that firms with separate titles outperform firms with combined titles. We tentatively conclude that proponents of legislation to force separation of titles have overlooked important costs.

JEL Classification: G30

Suggested Citation

Brickley, James A. and Coles, Jeffrey L. and Jarrell, Gregg A., Corporate Leadership Structure: On the Separation of the Positions of CEO and Chairman of the Board. Available at SSRN: https://ssrn.com/abstract=6124

James A. Brickley (Contact Author)

University of Rochester - Simon Business School ( email )

Carol Simon Hall 3-160L
Rochester, NY 14627
United States
585-275-3433 (Phone)
585-442-6323 (Fax)

Jeffrey L. Coles

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States
801-587-9093 (Phone)

Gregg A. Jarrell

University of Rochester - Simon School ( email )

Carol Simon Hall 4-110H
Rochester, NY 14627
United States
585-275-3914 (Phone)

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