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Article
Publication date: 9 August 2021

Sandra Alves

This study draws on agency, theory to evaluate the relationship between chief executive officer (CEO) duality and earnings quality, proxied by discretionary accruals…

Abstract

Purpose

This study draws on agency, theory to evaluate the relationship between chief executive officer (CEO) duality and earnings quality, proxied by discretionary accruals. Additionally, this study aims to examine whether board independence moderates the relationship between CEO duality and earnings quality.

Design/methodology/approach

This study uses a fixed-effects regression model to examine the effect of CEO duality on earnings quality and to test whether board independence moderates that relationship for a sample of non-financial listed Portuguese firms-year from 2002 to 2016.

Findings

Consistent with agency theory, this study suggests that CEO duality decreases earnings quality. Further, the results also suggest that the earnings quality reduction associated with CEO duality is attenuated when the board of directors has a higher proportion of independent directors.

Practical implications

The findings based on this study provide useful information to investors and regulators in evaluating the impact of CEO duality on earnings quality and the effect of board independence on the role of CEO duality, especially under concentrated ownership.

Originality/value

To the knowledge, this study is the first to investigate the role of board independence on the association between CEO duality and earnings quality. In addition, this paper is the first empirical study to investigate the direct and indirect effect of CEO duality on earnings quality in Portugal.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

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Book part
Publication date: 1 January 2008

Ahmed Kholeif

Purpose – This paper aims at re-examining the predictions of agency theory with regard to the negative association between CEO duality (i.e. the Chief Executive Officer…

Abstract

Purpose – This paper aims at re-examining the predictions of agency theory with regard to the negative association between CEO duality (i.e. the Chief Executive Officer, CEO, serves also as the board chairman) and corporate performance. It also examines the role of other corporate governance mechanisms (board size, top managerial ownership and institutional ownership) as moderating variables in the relationship between CEO duality and corporate performance.

Methodology/approach – This paper uses the financial statements for the year 2006 of most actively traded Egyptian companies to examine these predictions of agency theory. Moderated Regression Analysis is used to analyse the empirical data.

Findings – The findings indicated that the hypothesized relationships between CEO duality, the moderating variables and corporate performance have changed. For companies characterized by large boards and low top management ownership, corporate performance is negatively affected by CEO duality and positively impacted by institutional ownership.

Research limitations/implications – A limitation of this study is the use of accounting-based performance measures because of the expected earnings management behaviours by CEOs.

Practical implications – The Egyptian Capital Market Authority should adopt a reform programme to encourage Egyptian listed companies to modify their governance structures by increasing top management ownership and reducing board sizes before incorporating the new governance rules into the listing requirements.

Originality/value of paper – The paper contributes to the literature on corporate governance and corporate performance by introducing a framework for identifying and analysing moderating variables that affect the relationship between CEO duality and corporate performance.

Details

Corporate Governance in Less Developed and Emerging Economies
Type: Book
ISBN: 978-1-84855-252-4

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Book part
Publication date: 23 July 2014

Barry Sugarman

This article brings a new, broad conceptual framework to the quest for understanding dynamic capability in organizations (i.e., “managing on the edge of chaos”). This…

Abstract

This article brings a new, broad conceptual framework to the quest for understanding dynamic capability in organizations (i.e., “managing on the edge of chaos”). This approach rests on two major ideas: (i) a duality–paradox perspective and (ii) new typologies of organizational learning (OL) and individual action/thinking. A case of radical innovation at Microsoft provides a multilevel stimulus. Understanding it requires a focus on two dualistic challenges. For use in future ODC research and practical assessment, this broad new conceptual framework includes: (i) collaboration as a central concept; (ii) duality–paradox as a key source of conflicts that can threaten collaboration; (iii) five types of OL, (iv) four types of individual action/thinking, including paradoxical thinking, and (v) the proposition that “golden dualities” can be created from once-troubling duality situations (where critical collaboration was in danger) which have been transformed from the metaphorical “odd (contentious) couple” into a “productive (collaborative) partnership.”

Details

Research in Organizational Change and Development
Type: Book
ISBN: 978-1-78350-312-4

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Book part
Publication date: 13 August 2012

Charles P. Cullinan, Pamela Barton Roush and Xiaochuan Zheng

CEO duality occurs when the same individual holds both the CEO and board Chair positions. In some countries (such as Britain) CEO duality is considered to impair good…

Abstract

CEO duality occurs when the same individual holds both the CEO and board Chair positions. In some countries (such as Britain) CEO duality is considered to impair good corporate governance. In the United States, however, CEO duality is still a common practice. The Sarbanes–Oxley Act (SOX) included many corporate governance reforms, but the Act did not address the issue of CEO duality. However, we suggest that the corporate governance environment surrounding the passage of SOX may have influenced corporate board decisions regarding CEO duality when appointing new CEOs. In this study, we seek to determine whether CEO duality changed in the post-Sox environment by investigating the likelihood of CEO duality when CEO changes took place before and after SOX. Using a sample of 182 CEO succession events before and after the passage of SOX, we find that the likelihood of combining the CEO and Chair positions for newly appointed CEOs significantly decreased in the post-SOX period relative to the pre-SOX period. Our results suggest the SOX environment fostered a greater focus on governance issues even beyond the specific provisions of SOX.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78052-761-1

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Article
Publication date: 9 January 2020

Chaminda Wijethilake and Athula Ekanayake

This 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…

Abstract

Purpose

This 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/approach

Multiple 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.

Findings

The 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 implications

By 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/value

This 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.

Details

Social Responsibility Journal, vol. 16 no. 8
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 1 April 1999

William A. Jackson

Dualism ‐ the division of an object of study into separate, paired elements ‐ is widespread in economic and social theorising: key examples are the divisions between…

Abstract

Dualism ‐ the division of an object of study into separate, paired elements ‐ is widespread in economic and social theorising: key examples are the divisions between agency and structure, the individual and society, mind and body, values and facts, and knowledge and practice. In recent years, dualism has been criticised as exaggerating conceptual divisions and promoting an oversimplified, reductive outlook. A possible alternative to dualism is the notion of duality, derived from Giddens’s structuration theory, whereby the two elements are interdependent and no longer separate or opposed, although they remain conceptually distinct. This paper argues that duality, if handled carefully, can provide a superior framework to dualism for dealing with the complexity of economic and social institutions. Its main attraction is not its twofold character, which might profitably be relaxed where appropriate, but its ability to envisage a thoroughgoing interdependence of conceptually distinct elements.

Details

International Journal of Social Economics, vol. 26 no. 4
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 27 September 2019

Samuel Jebaraj Benjamin and Pallab Biswas

This study aims to examine whether CEO duality affects the association between board gender composition, dividend policy and cost of debt (COD).

Abstract

Purpose

This study aims to examine whether CEO duality affects the association between board gender composition, dividend policy and cost of debt (COD).

Design/methodology/approach

The S&P 1500 firms’ data for this study were collected from the Bloomberg professional service terminal for the period 2010-2015.

Findings

The results show that board gender composition positively impacts both a firm’s propensity to pay dividends and the level of payouts. However, this positive association is only present in firms with CEO duality. The authors find no significant association between board gender composition and COD, but when the authors split the sample into firms with and without CEO duality, the authors find a negative association in firms without CEO duality.

Practical implications

The empirical results highlight important issues for policymakers, managers and investors. The study provides positive feedback on corporate governance rejuvenation efforts that seek to engender and advocate the appointments of female directors to corporate boards. Market participants, such as financial analysts and lenders, could recognize the empirical specifics related to the influence of board gender composition on firms’ dividend policy and COD in the context of CEO duality.

Originality/value

This study fills an important gap in the literature on the relationship between board gender composition and its relation with dividend policy and COD.

Details

Accounting Research Journal, vol. 32 no. 3
Type: Research Article
ISSN: 1030-9616

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Article
Publication date: 11 April 2008

Nina T. Dorata and Steven T. Petra

This study seeks to examine whether CEO duality further exacerbates CEOs' motivation of self‐interest to engage in mergers and acquisitions to increase their compensation.

Abstract

Purpose

This study seeks to examine whether CEO duality further exacerbates CEOs' motivation of self‐interest to engage in mergers and acquisitions to increase their compensation.

Design/methodology/approach

Regression tests using CEO compensation as the dependent variable, and CEO duality, firm size and firm performance as independent test and control variables. The regression tests are used for various sub‐samples of the firms, those that merge and those that have CEO duality.

Findings

The results indicate that for merging firms CEO compensation is positively associated with firm size. However, this association is unaffected by CEO duality. For non‐merging firms, the results indicate that CEO compensation is positively associated with firm size and firm performance. CEO duality moderates the positive association between CEO compensation and firm performance.

Research limitations/implications

This study is limited to the extent that it does not observe the deliberations of compensation committees in their setting of CEO compensation, but only examines the outcomes of those deliberations. A future area of research is to examine compensation schemes of merger/acquisition CEOs in the context of other government structures, such as board independence and composition.

Practical implications

Shareholders who desire to keep CEO compensation levels positively associated with firm performance may consider supporting the separation of the positions of CEO and Chairperson of the Board.

Originality/value

This study contributes to the literature by concluding that governance structure influences CEO compensation schemes and CEOs of merging firms command higher compensation in spite of governance structure and firm performance.

Details

Managerial Finance, vol. 34 no. 5
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 1 August 2006

Aaron C.T. Smith and Fiona Graetz

The purpose of this paper is to describe how order‐generated rules applied to organizing form dualities can assist in creating the conditions for emergent, self‐organized…

Abstract

Purpose

The purpose of this paper is to describe how order‐generated rules applied to organizing form dualities can assist in creating the conditions for emergent, self‐organized behavior in organizations, thereby offering an operational deployment of complexity theory.

Design/methodology/approach

The paper begins by showing that the concept of dualities is consistent with complexity‐thinking. In addition, when applied to organizing forms, dualities represent a practical way of affecting an organization's balance between chaos and order. Thus, when augmented with order‐generating rules, organizing form dualities provide an access point for the practical instigation of edge of chaos conditions and the potential for emergence.

Findings

The paper maintains that many attempts to “manage” complexity have been associated with changes to organizing forms, specifically toward new forms of organizing. It is suggested that organizing form dualities provide some management guidance for encouraging the “edge of chaos” conditions advocated in complexity theory, although the details of self‐organization cannot be prescribed given the assumptions of non‐linearity associated with complexity theory perspectives. Finally, it is proposed that organizing dualities can elucidate the nature and application of order‐generating rules in non‐linear complex systems.

Practical implications

Dualities offer some guidance toward the practical implementation of complexity theory as they represent an accessible sub‐system where the forces for order and chaos – traditional and new forms of organizing respectively – are accessible and subject to manipulation.

Originality/value

The commonalities between dualities and complexity theory are intuitive, but little conceptual work has shown how the former can be employed as a guide to managing organizing forms. Moreover, this approach demonstrates that managers may be able to stimulate “edge of chaos” conditions in a practical way, without making positivistic assumptions about the causality associated with their efforts.

Details

Management Decision, vol. 44 no. 7
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 1 June 2001

Pak Yoong and Brent Gallupe

Electronic meeting facilitation (e‐facilitation) continues to be a critical success factor in the use of information technology to support face‐to‐face collaborative work…

Abstract

Electronic meeting facilitation (e‐facilitation) continues to be a critical success factor in the use of information technology to support face‐to‐face collaborative work. Yet researchers and practitioners continue to struggle to understand the subtleties and difficulties in the application of meeting facilitation techniques in the ‘electronic’ context. To clarify that understanding, this paper develops a new theoretical framework that examines how technology interacts with human facilitator behavior in an electronic group meeting. This framework, The Dualities of E‐Facilitation, is composed of two dualities: the Duality of Computer and Human Interaction, and the Duality of Routine and Intuitive Actions. The framework emerged from an analysis of the e‐facilitation behaviors of newly trained face‐to‐face electronic meeting facilitators.

Details

Journal of Systems and Information Technology, vol. 5 no. 1
Type: Research Article
ISSN: 1328-7265

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