CEO duality and corporate performance: evidence in the Brazilian capital market
DOI:
https://doi.org/10.5902/1983465919515Keywords:
CEO duality, Corporate performance, Corporate governanceAbstract
CEO duality is the practice in which the Chief Executive Officer (CEO) has both the presidency of the company as the chairman of its Board of Directors. The literature so far shows the positive and negative impact on organizational performance when this happens. The approach of the Agency theory suggests that these two functions should be exercised by different people. Therefore, this study aimed to verify the relationship between CEO duality and the corporate performance of companies listed on the Brazil Index (IBrX100) in the 2008 to 2013 period. The sample comprised 70 companies, totaling 420 observations in a balanced panel data. To investigate the relationship proposed by this study, two statistical strategies were used: the method of Ordinary Least Squares and Probit. The results showed that the duality did not affect the organizational performance when compared to the other explanatory variables. However, the performance was affected by the boar size and by the share concentration, as they were the only significant variables, meeting the findings of Daily and Dalton (1997) and Moscu (2013). This result confirms the premise that when duality exists, decisions generally tend to be centralized to avoid loss of control by managers.
Downloads
References
AMARAL-BAPTISTA, M. A.; KLOTZE, M. C.; MELO, M. A. C. Ceo duality and firm performance in Brazil: evidence from 2008. RPCA, v. 5 n. 1, p. 24-37, 2011.
ANDRADE, L, P.; SALAZAR, G. T.; CALEGÁRIO, C. L. L.; SILVA, S. S. Governança corporativa: uma análise da relação do conselho de administração com o valor de mercado e desempenho das empresas brasileiras. RAM – Revista de Administração Mackenzie, v. 10, n. 4, p. 4-31, 2009.
ARRUDA, G. S.; MADRUGA. S. R.; FREITAS JUNIOR, N. I. A governança corporativa e a teoria da agência em consonância com a controladoria. Rev. Adm. UFSM, v. 1, n. 1, p. 71-84, 2008.
BALIGA, B., MOYER, R., RAO, R. CEO duality and firm performance: What's the fuss? Strategic Management Journal, v. 17, p. 41-53, 1996.
BOONE, A.L.; FIELD, L.C.; KARPOFF, J.M.; RAHEJA, C.G. The determinants of corporate board size and composition: an empirical analysis. Journal of Financial Economics, n. 85, p. 66-101, 2007.
BRENNAN, N. Boards of Directors and Firm Performance: is there an expectations gap? Corporate Governance: An International Review, v. 14, n. 6, p. 577-593, 2006.
BROOKS, C. Introductory econometrics for finance. (2nd ed). Cambridge: Cambridge University Press, 2008.
CAIXE, D. F.; KRAUTER, E. A Influência da Estrutura de Propriedade e Controle sobre o Valor de Mercado Corporativo no Brasil. Revista Contabilidade & Finanças, v. 24, n. 62, p. 142-253, 2013.
CHEN, C. W.; LIN, J, B.; YI, B. Ceo duality and firm performance: an endogenous issue. Corporate Ownership & Control, v. 6, n. 1, p. 58-65, 2008.
CLAESSENS, S.; YUTORGLU, B. B. Corporate governance in emerging markets: A survey. Emerging Markets Review, n. 15, p. 1-33, 2013.
DAILY, C.; DALTON, D. CEO and board chair roles held jointly or separately: Much ado about nothing? The Academy of Management, v. 11, n. 3, p. 11-20, 1997.
DONALDSON, L.; DAVIS, J. Stewardship theory or agency theory? CEO governance and shareholder returns. Australian Journal of Management, v. 16, n. 1, p. 49-65, 1991.
DUTRA, M. G. L.; SAITO, R. Conselhos de administração: análise de sua composição em um conjunto de companhias abertas brasileiras. Revista de Administração Contemporânea, v. 6, n. 2, p. 9-27, 2002.
FAMA, E.; JENSEN, M. Separation of ownership and control. Journal of Law and Economics, v. 26, n. 2, p. 301-325, 1983.
GUJARATI, Damodar. Econometria básica. 4. ed. Rio de Janeiro: Campus, 2006.
HOLANDA, A. P.; COELHO, A. C. Estrutura de Propriedade em Firmas Brasileiras: Trajetória entre 1998 -2012. Revista de Finanças Aplicadas, n. 3, p. 1-39, 2014.
HOLTZ, L.; VARGAS, L. H. F.; MACEDO, M. A. F.; BORTOLON, P. M. Análise do tamanho do conselho de administração: evidências no mercado brasileiro. Advances in Scientific and Applied Accounting. São Paulo, v. 6, n. 3, p. 321-347, 2013.
INSTITUTO BRASILEIRO DE GOVERNANÇA CORPORATIVA – IBGC. Código das melhores práticas de governança corporativa. (4a ed.) Instituto Brasileiro de Governança Corporativa. São Paulo: IBGC, 2009.
IYENGAR, R.; ZAMPELLI E. M. Self-Selection, Endogeneity, and the Relationship between CEO Duality and Firm Performance. Strategic Management Journal, v. 30, n. 10, p. 1092-1112, 2009.
JENSEN, M. C. The modern industrial revolution, exit, and the failure of internal control systems. Journal of Finance, v. 48, n. 3, p. 831-880, 1993.
JENSEN, M. C.; MECKLING, W. H. Theory of the firm: managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, v. 3, n. 4, p. 305-360, 1976.
KRAUSE, R.; SEMADENI, M.; CANELLA JUNIOR, A. A. CEO Duality: A Review and Research Agenda. Journal of Management, v. 40, n. 1, p. 256-286, 2014.
LA PORTA, R.; SHLEIFER, A.; LOPEZ-DE-SILANES, F.; VISHNY, R. Investor protection, and corporate governance. Journal of Financial Economics, n. 58, p. 3-27, 2000.
LAM, T. Y.; LEE, S. K. CEO duality and firm performance: evidence from Hong Kong. Corporate Governance, v. 8, n. 3, p. 299-316, 2008.
MOSCU, R. G. Does CEO Duality Really Affect Corporate Performance? International Journal of Academic Research in Economics and Management Sciences, v. 2, n. 1, p. 156-166, 2013.
PENG, M.W. Outside directors and firm performance during institutional transitions. Strategic Management Journal, v. 25, n. 5, p. 453-471, 2004.
PIZETTA, K. C.; COSTA, F, M. O Papel do Conselho de Administração na Contratação da Empresa de Auditoria: Evidências Empíricas no Brasil. REPeC, Brasília, v. 7, n. 3, p. 291-304, 2013.
RODRIGUES, A. A. D. O. N. Uma análise comparativa entre a Teoria da Agência e a
Stewardship. Revista Fafibe On-Line, v. 6, n. 6, p. 67-77, 2013.
SHLEIFER, A.; VISHNY, R. W. A Survey of Corporate Governance. Journal of Finance, v. 52, n. 2, p. 737-783, 1997.
SILVEIRA, A. D. M.; BARROS, L. A. B. C.; FAMÁ, R. Estrutura de Governança e Valor das Companhias Abertas Brasileiras. RAE, v. 43, n. 3, p. 50-64, 2003.
UADIALE, O. M. The impact of board structure on corporate financial performance in Nigeria. International Journal of Business and Management, v. 5, n. 10, p. 155-166, 2010.
XIE B.; DAVIDSON W. N. III; DADALT P. J. Earnings Management and Corporate Governance: The Roles of the Board and the Audit Committee. Journal of Corporate Finance, 9 (3): p. 295–316, 2003.
Downloads
Published
How to Cite
Issue
Section
License
This journal remains the copyright holders of articles published. In order to be published, authors must sign the Copyrights Letter, which is sent to the authors by e-mail, thus granting rights, including on translation, to ReA/UFSM. The journal grants third parties the right to use, reproduce, and share the article according to the Creative Commons license agreement (CC-BY 4.0), as stated in the article’s PDF documents.
