Does the separation of the chief executive officer and chairman roles impact UK banks’ performance?

Xihui Chen, Jökull Hafthor Johannesson

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: This paper investigates the empirically impact of CEO status on the performance of the banks incorporated in the UK. The paper aims to discover the governance gaps creating a potential for alignment to UK Corporate Governance Code for listed and unlisted companies.
Design/Methodology/Approach: The study employs pooled data, the frequency analysis, descriptive statistics and the econometric analysis - Ordinary Least Square (OLS) and within estimators methods to evaluate the relationship between CEO status and the performance in 57 banks that listed on the Financial Services Authority (FSA) for the period 2007-2011.
Findings: Using data from the year 2007-2011 annual reports, the results showed that the separation of the post of chairperson and CEO has no statistically significant relationship with bank performance.
Research limitations/Implications: The study identifies areas of governance that only in the banks incorporated in the UK. Further research is needed to compare the governance structures and characteristics in other financial entities (e.g. insurance and commercial finance) or in an international scenario other than those of the banks in the UK.
Originality/Value: The originality of the study lies in identifying gaps in the governance mechanism among the listed and unlisted banks incorporated in the UK. Therefore, the paper provides data and knowledge for investors, government, and banks’ governors. The results of this paper are likely to encourage the improvement and development in governance regulation.
Original languageEnglish
Article number1
Pages (from-to)2-14
Number of pages13
JournalInternational Corporate Governance and Regimes.
Volume2
Issue number1
Publication statusPublished - 2012

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