CEO Duality Trends and Prospects : A Hybrid Analysis

Previous studies in the literature review that dealt with corporate governance have recently witnessed significant growth that led to some new trends. The purpose of the current paper is to significantly contribute to such trends through investigating and analyzing the effect of corporate governance mechanisms on firm’s financial performance for a sample consisting of industrial and service companies in Jordan. The current study examined cross sectional data through 109 companies (industrial and service companies). The study uses the annual reports for the fiscal year 2011 of the most active Jordanian companies in order to examine the predictions of corporate governance effects on financial performance. This cross sectional study tested all hypotheses of the study and used statistical software, SPSS 20, to analyze data. The findings indicated that board size has a negative association with firm financial performance. Furthermore, the empirical investigations for the current study revealed that the presence of independent directors in the board is not associated with financial performance. Likewise, the result showed that CEO duality has no impact on firm financial performance. From developed and developing countries’ perspective, the current paper uniquely contributes to the literature that dealt with corporate governance and firm performance throughout introducing a market share variable as a measurement to represent firm’s financial performance. In doing so, the paper is the first of its kind to provide new insights on the relationship between corporate governance and firm performance. It therefore provides a new indicator considered as extending for prior research in this discipline as, to the best of researcher’s knowledge; no prior work has been done in both developed and developing economies including Jordan. The study provides empirical evidence to the academic, policy makers and all beneficiary parties of stakeholders in the Middle East, specifically Jordan.

Corporate governance is being acknowledged by almost all kinds of business communities and firms as an ultimate driver to improve the firm financial performance. This study examined the association between corporate board structure and corporate financial performance using a dynamic panel model. Principles of corporate governance deliver an explicit board structure for the purpose to facilitate the board members, which helps in making good decisions. The board of directors consists of the CEO, the chairman, the internal directors, and the external non‐executive directors to work for the shareholders. This study undertakes different corporate governance attributes including non‐executive directors, board size, and CEO duality and examines its effect on firm performance. The dynamic panel model is used, and preestimation and postestimation tests were conducted for the validity of the model. This study found a significant effect of board size, CEO duality, and non‐executive directors on firm performance. The findings show that most of the governance variables are endogenous by nature. Results are consistent with agency theory. This study provides the theoretical and empirical evidence and applies a superior model (dynamic panel model) to better explain the association between corporate board structure and corporate firm performance in listed firms.

Many studies have examined the relationship between corporate social responsibility (CSR) and a firm’s financial performance. These investigations have had mixed results. Some studies find a positive relationship, others find a negative relationship, and yet some studies find no significant relationship. This ambiguity highlights the complexity of the relationship between CSR initiatives and firm performance. The present study attempts to better understand this relationship. As such, it has two objectives. Since most of the previous studies have examined a linear relationship between CSR and a company's financial performance, the first objective of this study is to investigate whether there is any nonlinear relationship between CSR and firm’s financial performance. The second objective of this study is to examine the moderating effects of corporate governance factors, especially the board of directors’ characteristics such as board size, board independence, board gender diversity, and CEO duality on the relationship between CSR and a firm’s financial performance. The latter factors have not been fully considered in previous studies as the focus has been on the direct link between CSR and the firm’s financial performance. The study uses panel data from a sample of 82 firms from a large group of publicly traded American firms, which are listed on the U.S. stock exchange and are part of the S&P 500 index covering the years 2012-2021, and a nonlinear panel regression model to estimate the relationship between firm’s financial performance as measured by Return on Asset (ROA) and CSR disclosure index along with a control variable and four Corporate Governance indicators and their interactions with CSR disclosure index. The study finds a non-linear positive relationship between firm’s performance and CSR, suggesting a declining effect of CSR on firm’s performance at higher levels of CSR. It also finds that board gender diversity positively affects the relationship between CSR and a firm’s financial performance. We find no statistically significant interactions between CSR and the Governance indicators of board size, board independence and CEO duality.

The impact of board and audit committee characteristics on voluntary disclosure: A meta-analysis

This study examines the impact of board structure on corporate financial performance in Nigeria. It investigates the Diversity of boards of directors in Nigerian firms and analyses whether board structure has an impact on financial performance, as measured by return on equity (ROE) and return on capital employed (ROCE). Based on the extensive literature, four board characteristics (board Diversity, board size, board ownership and CEO duality) have been identified as possibly having an impact on corporate financial performance and these characteristics are set as the independent variables. The Ordinary Least Squares (OLS) regression was used to estimate the relationship between corporate performance measures and the independent variables. Findings from the study show that there is strong positive association between board size and corporate financial performance. Evidence also exists that there is a positive association between outside directors sitting on the board and corporate financial performance. However, a negative association was observed between directors’ stockholding and firm financial performance measures. In addition, the study reveals a negative association between ROE and CEO duality, while a strong positive association was observed between ROCE and CEO duality. The study suggests that large board size should be encouraged and the Diversity of outside directors as members of the board should be sustained and improved upon to enhance corporate financial performance.

This paper examines the impact of corporate governance mechanisms including board size, independence, and meeting frequency, audit committee size and meeting frequency, CEO duality and ownership concentration on the operational, financial and market performance of Saudi listed firms using a contingent theoretical-based framework drawing on agency theory, stewardship theory and resource dependence theory. This study examines 210 listed Saudi Stock Exchange firms over the timeframe 2017 to 2019. The paper applies both a manual content and regression analysis approach. The results show that firm performance deteriorates with board size and independence, audit committee and meeting frequency, and the presence of CEO role duality, while performance improves with board meeting frequency and ownership concentration. Thus, Saudi firms should respond by maintaining smaller boards and more frequent meetings, keeping the Chair and CEO roles separate, and maintaining smaller audit committees with more focused meetings. Further, the appointment of independent directors only makes a meaningful contribution to firm performance where they are truly independent. Finally, more concentrated ownership tends to encourage better firm performance due to the regime of monitoring and discipline concomitant with more powerful shareholders. The implications of this paper are threefold. First, the implementation by Saudi Arabia of the latest corporate governance regulations and IFRS adoption almost certainly impact firm performance markedly. Second, corporate governance regulations should recognize the role of more frequent board meetings and more concentrated ownership in enhancing corporate performance. Third, stakeholders should apply pressure on investee firms to maintain smaller boards, engage genuinely independent directors, separate the role of Chairman and CEO, and maintain smaller audit committees with fewer and more effective meetings. The results should help corporate boards when deciding on the best corporate governance mechanisms to enhance firm performance. Further, the study should provide policy makers with a better understanding of the corporate governance structures required to promote better performance by drawing on existing theories and the empirical modelling, in an emerging economy setting such as Saudi Arabia, a new and broader data set, thereby informing better future policy and protecting shareholders’ interests.

Nowadays, directors’ remuneration has become increasingly popular and being discussed by all walks of life. Through a holistic approach based on corporate governance best practice, it could affect the internal and external performance of corporate in terms of management and financial performance. The main objective of the study is to investigate the directors’ remuneration listed under property and construction industry towards firm performance. 266 samples of annual reports of listed firms for the period of 2013 to 2015 were obtained and examined. The regression results show that directors’ remunerations have significantly positive relationship with firm performance. Appealing remuneration package encourages and attracts the directors who have the ability and potential in successfully managing the firm. Most of control variables have significant relationship with firm financial performance except CEO duality which does not have significant relationship with financial performance. Future studies could recommend using other performance measures such as Tobin Q or Economic Value Added (EVA) and the total directors’ remuneration could be broken up to several parts which could reveal new research insights.

PurposeThis study aims to draw on the resource dependence theory to synthesize the conflicting arguments as well as commonalities of the agency and stewardship perspectives on the relationship between CEO duality and firm performance.Design/methodology/approachMultiple regression analysis is used to analyze the data collected from a sample of 212 large-scale publicly listed companies representing 20 sectors in the Colombo Stock Exchange in Sri Lanka.FindingsThe research results based on all of 212 publicly listed companies in Sri Lanka show, in support of the agency theory, that CEO duality exerts a negative effect on firm performance when the CEO is equipped with additional informal power. Conversely, CEO duality exhibits a positive effect on firm performance when board involvements are high, a finding that supports the commonalities of the agency and stewardship theoretical perspectives.Practical implicationsBy examining the governance practices and concepts in an Asian developing economy, this study provides insight into the power dynamics between the CEO and the board of directors in managerial contexts that are largely different from those in western countries.Originality/valueThis study expands the theoretical underpinning of corporate governance research by identifying the performance implications of CEO duality within the broad context of the resource provision of the board of directors and the informal power of CEOs.

Purpose: The study investigates the effect of eight conventional governance mechanisms, namely (board size, CEO duality, audit committee (AUDC) size, AUDC independence, board structure, AUDC number of meetings, board gender, and external audit quality), on financial performance for a sample of 246 non-financial listed firms in GCC countries from 2015-2019. Design/Methodology/Approach: Several models have been run using "Hierarchical Multiple Regression" for six GCC countries. Findings: The study has revealed different results for example, board size, AUDC size and AUDC number of meetings have insignificant effect on firm performance in most GCC countries. In contrast, board gender and board structure are the most determining factors of financial performance in GCC countries. Research Limitations/Implications: The results of the study call for legislative amendments that would urge companies to increase the number of non-executive members and empower females to effectively participate in corporate boards through the quota system. Originality/Significance: The current study is one of the few studies on governance in emerging Islamic markets, and therefore it contributes to the accounting literature by identifying the characteristics of governance in these countries. Practical and Social implications: Regulators should visit Islamic corporate governance rules and practices in financial institutions to improve conventional corporate governance in non-financial firms.

Accounting Disclosure Pattern and its Relationship with Disclosure Level for CSR and its Financial Performance (An Empirical Study on Saudi Companies) ملخص البحث هدفت الدراسة الى تقديم دليل تجريبي من بيئة الاعمال السعودية يسهم في توصيف العلاقة بين انماط الافصاح المحاسبي الاجتماعي التي تتبناها الشركات (وصفي، كمي غير نقدي، نقدي) ومستوى افصاحها عن مسئوليتها الاجتماعية وادائها المالي. لتحقيق هذا الهدف تم استخدام المنهج الوصفي التحليلي، حيث تم اختبار ثلاث فرضيات بحثية تتولى استكشاف العلاقة بين هذه المتغيرات في ظل وجود ستة متغيرات ضابطة هي: الدور المزدوج للمدير التنفيذي الاول، تركز الملكية، نسبة المديونية، الربحية، حجم الشركة، ونوع الصناعة، واستند بشكل اساسي في تطوير الفرضيات وتحديد الاتجاه المتوقع للعلاقات التي تتضمنها على نظريتي الاشارة والشرعية. وقد توصل البحث إلى النتائج التالية:1) ان انماط الافصاح المحاسبي الاجتماعي التي تتبناها الشركات السعودية لها تأثير ايجابي على ادائها المالي،2) وان هذا التأثير يعمل فقط من خلال تفاعل هذه الانماط مع مستوى افصاح الشركات عن مسئوليتها الاجتماعية، ومن ثم يكون لها تأثير وسيط أو منظم للعلاقة بين مستوى الافصاح الاجتماعــــــــي والاداء المالي، و3) ان هناك علاقة طردية بين درجة تطور نمط ومستوى الافصاح الاجتماعي، مما قد يشير الى ان الشركات السعودية - في سبيل تحسين أدائها المالي- قد تعمد الى تبني انماط افصاح محاسبي اجتماعي اكثر تطورا (الكمي، النقدي) كلما كان مستوى افصاحها الاجتماعي مرتفعا، واقل تطورا (الوصفي) كلما كان مستوى افصاحها الاجتماعي منخفضا. إن النتائج التي توصل اليها البحث الحالي ينتظر أن تمهد الطريق لدراسات وضعية وقياسية مستقبلية تستهدف التركيز على الكيف وليس الكم فيما يتعلق بالإفصاح المحاسبي الاختياري بصفة عامة والاجتماعي بصفة خاصة، بالإضافة الى أنها تلفت الانتباه الى أهمية نمط الافصاح المحاسبي ودرجة تطوره في التأثير على مضمون الرسالة المحاسبية التي يتم الافصاح عنها، وان اختيار نمط محدد للإفصاح الاجتماعي لا يتم بشكل عشوائي بل يكمن ورائه دوافع اقتصادية، وهو ما يفتح الطريق امام آفاق بحثية جديدة تركز على هذا الجانب. الكلمات الدالة: مستوى الافصاح عن المسئولية الاجتماعية للشركة، انماط الافصاح المحاسبي، الاداء المالي. Abstract The purpose of this study is to pro-vide empirical evidence from Saudi bu-siness environment that contributes to the characterization of the relationship between the patterns of corporate social accounting disclosure (descriptive, qua-ntitative non-monetary and mone-tary), disclosure level for corporate so-cial responsibility(CSR) and its fina-ncial performance. To achieve this pu-rpose an analytical descriptive method was used, where three research hypo-theses were tested for exploring the re-lationship between these variables. six control variables are included in the test model, namely: CEO duality, owner-ship concentration, debt ratio, profit-ability, firm size and type of industry. signaling and legitimacy theories are used to develop the research hypoth-eses. This study has reached the following results: 1) that social accounting dis-closure patterns adopted by Saudi co-mpanies have a positive impact on its financial performance, 2) and that this effect works only through interaction of these patterns with the level of CSR disclosure, and thus have a moderating impact on the relationship between so-cial disclosure level and financial per-formance, And 3) a positive correlation was found between degree of sop his-tication of accounting disclosure pattern and CSR disclosure level, which could imply that Saudi companies - to imp-rove their financial performance - adopt more sophisticated patterns of social accounting disclosure (quantitative, mo-netary) whenever the social disclosure is at a high level, and adopt a less so-phisticated patterns of social accounting disclosure (descriptive) whenever the social disclosure is at a low level. The findings of the current research are expected to pave the way for future positive and normative studies designed to focus on quality, not quantity with regard to voluntary accounting disclo-sure in general and social in particular, additionally, it draws attention to the importance of accounting disclosure pattern and its degree of sophistication in influencing the content of the acc-ounting message disclosed, The adopt-ion of a specific pattern of social disc-losure is not haphazard but behind ec-onomic motives, which opens the way to new research horizons focus on this aspect. Keywords: corporate social response-bility disclosure, accounting disclosure patterns, financial performance.

Corporate governance has drawn attention of investors and government after the incidence of financial crisis world- wide since the late 90’s. Despite that reforms of corporate governance have been in place in Malaysia, voluntary disclosure of corporate governance has yet to proof its impact on the financial performance of the companies. This study examines the relationship between corporate governance attributes and firm financial performance in Malaysia. The relationship between board characteristics (board tenure, board size and CEO duality) were analyzed to investigate their correlation with firm financial performances. A total of 100 public listed companies were randomly selected from Bursa Malaysia for the year 2009 to 2013. Random effect panel data regression was obtained by using Stata. This study finds that board size, board tenure were significant to Return on Equity (ROE) and Return on Assets (ROA). However, firm size has no significant relationship with firm financial performance. It is recommended that apart from including more variables as controlling effects on firm financial performance and examining few industries as sample, it is also good to examine the correlation between board characteristics and corporate governance variables (foreign listings, equity analysis, external auditors, leverage ratios, dividend policy, etc.) on one hand, and ownership structures on the other hand, that have significant impact on firm financial performance.

Purpose: This study attempts to analyze the influence of board structure (board size, board independence, CEO duality, insider ownership) on performance of Bangladeshi listed nonfinancial firms during the post-shock period of stock prices. Methodology: Putting stress on the issue of controlling for any possible endogeneity problems prevails in the effects of structure of board on corporate performance this study employed the Durbin-Wu-Hausman test as the presence of endogeneity severely makes the OLS estimates biased. Therefore, satisfying endogeneity and overidentification tests the observed data have been analyzed by 2SLS as well as OLS regression models. In an attempt to choose the consistent coefficients between OLS and 2SLS a Hausman test was applied. Findings: Results of the study suggest that a board featuring more directors improve accounting measures of performance and a board having more independent directors also significantly assist firms to enhance their market measure of performance. CEO duality is found detrimental to the accounting measures of performance. Apart from, findings support that holding more ownership by insiders leads to enhance firm performance. Thus, it provides empirical evidence to support a view of agency theory that large board, board independence, and insider ownership are good incentives to the firm to monitor and supervise managerial activities and minimize agency problems. Practical Implication: Overall, findings of the study are posing some implications for academics, practitioners, and policy makers in advancing the existing knowledge domain and formulating governance policies in the context of emerging countries like Bangladesh. Originality: The driving force of this work was to investigate how effective the corporate governance directives/notifications in regard to board independence and insider ownership was in protecting the shareholders’ interest during the post-shock period of stock prices in Bangladesh. Therefore, this study provides a robust result with regard to the impacts of reformed corporate governance notification (CGN 2012) on firm performance in Bangladesh.

This study empirically investigates the linkage between boardroom independence and the financial performance of non-financial firms in an emerging market featured by family-controlled businesses and concentrated ownership. The relationship is tested in a sample of 152 non-financial firms listed on the Pakistan Stock Exchange over a period from 2003 to 2018. Firms’ financial performance is measured through return on assets (ROA), return on equity (ROE), market-to-book ratio (MBR), and Tobin’s Q (TQ), while boardroom independence is measured through the proportion of non-executive directors on the corporate board. Using the dynamic GMM approach to address the possibility of endogeneity, it was found that boardroom independence is significantly negatively related to the financial performance of the sample firms. This negative impact is due to the reason of close ties of outside independent directors (non-executive directors) with dominant shareholders and management in personal, financial, and social terms. A significant negative influence of the board size and CEO duality on firms’ financial performance was also observed. The present study will add to the existing literature on corporate governance and firm financial performance using firm-level manually collected data. Further, our findings will also help the policymakers by providing empirical insights for strengthening corporate governance mechanisms in emerging market economies, specifically in the context of Pakistan.

Our econometric analyses used logistic regression to test the relation between CEO duality, a dummy variable equal to one if there is duality and 0 otherwise with independent variables regarding firm characteristics (firm age, size and economic sector), corporate governance (ownership structure, CEO age and governance level), and firm economic and financial performance. Our sample consisted of a balanced panel of 160 Brazilian publicly traded companies listed on B3 S.A., with data from 2010 to 2016. Our results indicate that CEO duality was positively related with higher CEO age and superior financial performance. Conversely, CEO duality was negatively related with firm size, belonging to special listing segments, belonging to regulated sectors, board size and foreign capital ownership. Our results are robust to different specifications and different econometric techniques.

This study aims to examine the impact of CEO duality on Corporate Social Responsibility (CSR) reporting by public listed companies in Malaysia. Content analysis was used to determine the extent of CSR reporting. A reporting level index consisting of 51 items was developed based on six themes: General, Community, Environment, Human Resource, Marketplace and Other. In order to determine the relationship between CEO duality and CSR reporting, an Ordinary Least Square regression was employed. The finding of the study is that, there is no significant association between CEO duality and CSR reporting. CEOs have little interest to promote CSR as it is not cost free and may lead to loss of individual wealth. The finding of this study implies that dual leadership structure reduces checks and balance and makes CEOs less accountable to all stakeholders. As for regulators, this study will provide valuable input to assist in their continuous efforts to improve corporate governance and social responsibility practices that may promote the interest of all stakeholders.