CEO duality and firm performance: evidence from Hong Kong

CEO duality and firm performance: evidence from Hong Kong Purpose – This paper seeks to examine the relationship between chief executive officer (CEO) duality and firm performance and the moderating effects of the family control factor on this relationship with respect to public companies in Hong Kong. Design/methodology/approach – This study employs publicly available data from financial databases and the annual reports of a sample of 128 publicly‐listed companies in Hong Kong in 2003. Findings – Neither agency theory nor stewardship theory alone can adequately explain the duality‐performance relationship. The empirical evidence suggests that the relationship between CEO duality and accounting performance is contingent on the presence of the family control factor. CEO duality is good for non‐family firms, while non‐duality is good for family‐controlled firms. Research limitations/implications – The study is based on publicly available financial data, and actual board processes are not observed. Practical implications – The design of board leadership structure is contingent on corporate ownership and control (family control or not). Originality/value – The paper provides empirical evidence that CEO duality is not necessarily bad for public companies in Hong Kong and would be of interest to regulatory bodies, business practitioners, and academic researchers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Corporate Governance Emerald Publishing

CEO duality and firm performance: evidence from Hong Kong

Corporate Governance, Volume 8 (3): 18 – Jun 13, 2008

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Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
1472-0701
DOI
10.1108/14720700810879187
Publisher site
See Article on Publisher Site

Abstract

Purpose – This paper seeks to examine the relationship between chief executive officer (CEO) duality and firm performance and the moderating effects of the family control factor on this relationship with respect to public companies in Hong Kong. Design/methodology/approach – This study employs publicly available data from financial databases and the annual reports of a sample of 128 publicly‐listed companies in Hong Kong in 2003. Findings – Neither agency theory nor stewardship theory alone can adequately explain the duality‐performance relationship. The empirical evidence suggests that the relationship between CEO duality and accounting performance is contingent on the presence of the family control factor. CEO duality is good for non‐family firms, while non‐duality is good for family‐controlled firms. Research limitations/implications – The study is based on publicly available financial data, and actual board processes are not observed. Practical implications – The design of board leadership structure is contingent on corporate ownership and control (family control or not). Originality/value – The paper provides empirical evidence that CEO duality is not necessarily bad for public companies in Hong Kong and would be of interest to regulatory bodies, business practitioners, and academic researchers.

Journal

Corporate GovernanceEmerald Publishing

Published: Jun 13, 2008

Keywords: Corporate governance; Board of Directors; Chief executives; Organizational performance; Family; Hong Kong

References

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