The relationship between Chief Executive Officer duality and subsequent corporate financial performance.

摘要

Bifurcating Chief Executive Officer (CEO) duality, an organization CEO concurrently being the Chairman of the Board for the same entity, is being advocated by interested groups such as regulators and shareholders. More companies are changing from a dual to a separated Chair-CEO structure. However, there exists little empirical research to support either structure. This dissertation examines the relationship between dual and separated Chairs-CEOs of 485 S&P 500 companies for the years 2003 and 2004 for the dependent variables subsequent leverage, and return on equity and assets. In the first hypothesis, whether a relationship exists between CEO-Chair structure and subsequent return on equity, the research indicates that return on equity is greater for dual than separated firms but the relationship is not statistically significant at the .05 level. For the second hypothesis, whether a relationship exists between subsequent return on assets and CEO-Chair status, testing indicates that return on assets is greater for dual than bifurcated roles but the findings are inconclusive in that three statistical tests indicate no statistical significance while a median test indicates significance at the .05 level. For the third hypothesis, whether a relationship exists between CEO-Chair status and subsequent leverage, analyses indicate that leverage is almost twice as great for dual compared to separated roles and four of the four statistical tests indicate that leverage is statistically significant at the .05 level.