| Firm's practicing CEO Duality have been under continuous pressure from shareholder activists and others to separate the positions of Chief Executive Officer and Board Chair. Sarbanes-Oxley, (2002) and Dodd-Frank, (2010) provided additional pressure to separate the two positions. Management theorists frequently align themselves with Agency Theory suggesting that CEO Duality is unlikely to be beneficial to a firm's performance. However, academic studies are generally inconsistent in findings related to this negative performance assumption (Dalton, Daily, Ellstrand, & Johnson, 1998; Dalton & Dalton, 2011; Rhoades, Rechner, & Sundaramurthy, 2001). This study assesses CEO Duality within the context of the most recent financial crisis and examines performance from both financial and market perspectives. It includes the population of 2011 S&P 500 firms that employed either separate or combined leadership structures for the calendar years 2008 - 2010 (n = 271 firms). Relying on nonparametric statistical analysis it was discovered that firms practicing CEO Duality are associated with higher levels of financial performance. However, CEO Duality is associated with lower levels of market performance. Findings are explained, study limitations are discussed, and suggestions for future research are offered. |
