TY - JOUR
T1 - “How” and “When” CEO Duality Matter? Case of a Developing Economy
AU - Ali, Shahid
AU - Naseem, Muhammad Akram
AU - Jiang, Junfeng
AU - Rehman, Ramiz Ur
AU - Malik, Fizzah
AU - Ahmad, Muhammad Ishfaq
N1 - Publisher Copyright:
© The Author(s) 2022.
PY - 2022/8/9
Y1 - 2022/8/9
N2 - This study addresses the questions of “How” and “When” CEO duality affects firm performance from a developing country’s perspective. To address the research question, CEO duality serves as an explanatory variable, board effectiveness as a mediator, CEO personal characteristics as moderator, firm-specific characteristics as control, and performance indicators as a dependent variable. Our dataset comprises 163 Pakistani firms listed on the Pakistan Stock Exchange for 2009 to 2018. Results demonstrate that CEO’s duality negatively affects a firm’s financial performance; however, board effectiveness mediates the link between CEO duality and firm performance. The results support the agency theory framework. Furthermore, findings proposed that the CEO’s attributes (age, gender, and financial education) significantly moderate the link between a CEO’s duality and firm performance. The findings may be generalized among the developing countries and net 11 (N-11) specifically. The current study claims to be the first one that explores the mediating role of the board effectiveness and moderating role of the CEO personal attributes together on a duality-performance link employing Pakistan’s corporate data. The findings suggest that policymakers and regulators ensure separation of power between Chairman and CEO to assure transparency through induction of more independence in the board room.
AB - This study addresses the questions of “How” and “When” CEO duality affects firm performance from a developing country’s perspective. To address the research question, CEO duality serves as an explanatory variable, board effectiveness as a mediator, CEO personal characteristics as moderator, firm-specific characteristics as control, and performance indicators as a dependent variable. Our dataset comprises 163 Pakistani firms listed on the Pakistan Stock Exchange for 2009 to 2018. Results demonstrate that CEO’s duality negatively affects a firm’s financial performance; however, board effectiveness mediates the link between CEO duality and firm performance. The results support the agency theory framework. Furthermore, findings proposed that the CEO’s attributes (age, gender, and financial education) significantly moderate the link between a CEO’s duality and firm performance. The findings may be generalized among the developing countries and net 11 (N-11) specifically. The current study claims to be the first one that explores the mediating role of the board effectiveness and moderating role of the CEO personal attributes together on a duality-performance link employing Pakistan’s corporate data. The findings suggest that policymakers and regulators ensure separation of power between Chairman and CEO to assure transparency through induction of more independence in the board room.
UR - http://www.scopus.com/inward/record.url?scp=85136976984&partnerID=8YFLogxK
U2 - 10.1177/21582440221116113
DO - 10.1177/21582440221116113
M3 - Article
AN - SCOPUS:85136976984
SN - 2158-2440
VL - 12
JO - SAGE Open
JF - SAGE Open
IS - 3
ER -