Effects of founder CEO duality and board size on foreign IPOs’ survival in US markets

Purpose This study aims to investigate how three critical governance decisions by foreign firms impacted their survivability post-initial public offerings (IPO): the choice of CEO (founder vs non-founder); the power the founder CEO wields relative to the board in terms of CEO duality; and board size. Design/methodology/approach This study uses data from 86 foreign firms that completed IPOs in the US market between 2000 and 2008 and adopts a Cox proportional hazards model to examine how the founder, founder CEO duality and board size influence foreign firm delisting post-IPO. Findings A founder CEO or a founder CEO with duality (i.e. when a founder CEO is also chair of the board of directors) does not support a foreign firm’s survival post-IPO. Expectedly, board size has a negative impact on post-IPO firm survivability; however, founder CEO duality positively moderates this negative relationship. Therefore, founder CEO duality plays a positive indirect role in the context of post-IPO firms with large boards. Originality/value First, while the benefits of CEO duality have been empirically ambiguous, this study clarifies how founder CEO duality manifests its positive impacts in foreign listings. Second, by focusing on board cognition, this study confirms the negative impact of large boards, but highlights that this can be mitigated by governance leadership structure. Finally, despite organizational life-cycle theorists’ advocacy of the replacement of founder CEOs with professional CEOs in sizable ventures, this study shows the benefits of their retention when the board is large.

The Impact of CEO Duality and Financial Performance on CSR Disclosure: Empirical Evidence from State-Owned Enterprises in China

: This paper studies the effects of a firm’s financial performance (FP) and chief executive officer’s (CEO) duality on the quality of corporate social responsibility (CSR) disclosure in the context of state-owned enterprises (SOEs) among Chinese A-share-registered companies. The results depict a negative relationship between CEO duality and CSR disclosure. Our results demonstrate that better-performing firms disclose CSR information more frequently and of higher quality compared with firms with poor financial performance. This role of financial performance in the quality of CSR disclosure is generally valuable in public enterprises; however, it is relatively sluggish in state-owned enterprises The outcomes indicate that the dual leadership structure reduces assessments and renders CEOs less liable to their stakeholders. Therefore, this study offers valuable information and details for regulators to improve corporate governance and CSR from the perspective of stakeholder theory.

The Relationship Between CEO Duality and Business Firms’ Performance: The Moderating Role of Firm Size and Corporate Social Responsibility

This study focuses on exploring the relationship between chief executive officer (CEO) duality and firm performance. We focus on how the size and corporate social responsibility (CSR) of firms moderate this relationship. In terms of size, business organizations are of two types: small and large firms. This study uses datasets of listed Chinese business firms included in the China Stock Market and Accounting Research database. It employs a generalized method of moment’s technique to explore the connection between CEO duality and the performance of Chinese business firms through double mediation effects. Our empirical analysis showed that CEO duality has a significant negative relationship with firm performance. We also explored the moderating effects of firm size (small and large) and CSR practices on the relationship between CEO duality and improved performance of Chinese firms. Large firms and CSR practices showed significant and positive moderating effects on the relationship between CEO duality and firm performance. Conversely, with CEO duality, small firms showed a negative moderating influence on firm performance. This inclusive model provides valuable insights into how the dual role of the CEO of a firm affected the performance of Chinese firms through the moderating role of CSR practices and firm size for better business performance. The study offers empirical and theoretical contributions to the corporate governance literature. This research framework might help researchers in designing robust strategies to evaluate the effects on firm performance. Researchers may gain helpful insights using this methodology.

The Role of Board Leadership Structure in Firm Governance

Boards of directors are governing bodies that reside at the apex of the modern corporation. Boards monitor the behavior of firm management, provide managers access to knowledge, expertise, and external networks, and serve as advisors and sounding boards for the CEO. Board attributes such as board size and independence, director demographics, and firm ownership have all been studied as antecedents of effective board functioning and, ultimately, firm performance. Steady progress has been made toward understanding how boards influence firm outcomes, but several key questions about board leadership structure remain unresolved. Research on board leadership structure encompasses the study of board chairs, lead independent directors, and board committees. Board chair research indicates that when held by competent individuals, this key leadership position has the potential to contribute to efficient board functioning and firm performance. Researchers have found conflicting evidence regarding CEO duality, the practice of the CEO also serving as the board chair. The effect of this phenomenon—once ubiquitous among U.S. boards—ranges widely based on circumstances such as board independence, CEO power, and/or environmental conditions. Progressively, however, potential negative consequences of CEO duality proposed by agency theory appear to be counterbalanced by other governance mechanisms and regulatory changes. A popular mechanism for a compromise between the benefits of CEO duality and independent monitoring is to establish the role of a lead independent director. Although research on this role is in its early stage, results suggest that when implemented properly, the lead independent director can aid board monitoring without adding confusion to a unified chain of command. Board oversight committees, another key board leadership mechanism, improve directors’ access to information, enhance decision-making quality by allowing directors to focus on specialized topics outside of board meetings, and increase the speed of response to critical matters. Future research on the governance roles of boards, leadership configurations, and board committees is likely to explore theories beyond agency and resource dependence, as well as rely less on collecting archival data and more on finding creative ways to access rarely examined board interactions, such as board and committee meetings and executive sessions.

COVID-19 implications for corporate social responsibility, corporate governance and profitability in banks: The case of Egypt

This paper aims to measure the relationship between Corporate Social Responsibility (CSR), Corporate Governance (CG), and profitability in listed Egyptian banks. COVID-19 is expected to affect this relationship if the year 2020 is taken. Profitability is measured by earnings per share (EPS), return on equity (ROE), and return on assets (ROA). CSR is measured as a dummy variable and CG is measured by the chief executive officer (CEO) duality. There are three control variables, such as the Islamic variable, which classifies a bank into Islamic or conventional, bank age, and bank size. The paper uses multiple regression and logistic regression models. The final sample is 12 banks consisting of 9 conventional banks and 3 Islamic banks (IBS). The results show no impact of profitability on CSR. The results prove a significant positive impact of profitability on CG; there is a significant negative relationship between CEO duality and EPS at a 0.05 level. CSR has a significant impact on CG at a 0.001 level. The results show a clear impact of COVID-19 on the impact of CSR on profitability only when measured by ROA at 0.001 in the period 2014–2019.

Effects of International Exposure on Corporate Social Responsibility of the Chinese Corporate Sector: The Moderating Role of CEO Duality

<p>International exposure of a firm into new environments is one of the most important paths to firm growth. It provides growth opportunities and learning, and poses challenges of managing uncertainties of the new institutional environment, and demands of diverse domestic and international stakeholders. Despite the abundance of research on the effects of international exposure of a firm on its performance, the effects on corporate social responsibility (CSR) are not well understood. In addition to examining the direct effects of the international exposure of a firm on CSR activities in the home country, this study also examines the moderating role of Chief Executive Officer (CEO) duality in the association between international exposure of a firm and CSR activities in the home country. Drawing from institutional theory and agency theory, this study argues that international exposure of a firm leads to a decrease in CSR activities in the home country. It further posits that CEO duality also negatively affects CSR activities in the home country. Further, the proposed moderation hypotheses argue that the negative effects of international exposure of a firm on CSR activities in the home country are stronger for firms with CEO duality as compared to non-duality. The proposed hypotheses are tested with data from 240 publicly listed Chinese firms between 2008 and 2016, consisting of 1920 firm-years. The panel data is analysed using Linear Mixed Modelling (LMM) with the SPSS software. The findings support all the proposed hypotheses. This study makes three key contributions. Firstly, the study uses the institutional theory and agency theory to provide evidence for the negative effects of international exposure of a firm and CEO duality on CSR activities in the home country. Secondly, it enhances the understanding of how CEO duality acts as a boundary condition between international exposure of a firm and CSR relationships. Thirdly, it contributes to the emerging economy multinational enterprises literature by enhancing understanding of the proposed relationships in the context of the Chinese corporate sector.</p>

Effects of International Exposure on Corporate Social Responsibility of the Chinese Corporate Sector: The Moderating Role of CEO Duality

<p>International exposure of a firm into new environments is one of the most important paths to firm growth. It provides growth opportunities and learning, and poses challenges of managing uncertainties of the new institutional environment, and demands of diverse domestic and international stakeholders. Despite the abundance of research on the effects of international exposure of a firm on its performance, the effects on corporate social responsibility (CSR) are not well understood. In addition to examining the direct effects of the international exposure of a firm on CSR activities in the home country, this study also examines the moderating role of Chief Executive Officer (CEO) duality in the association between international exposure of a firm and CSR activities in the home country. Drawing from institutional theory and agency theory, this study argues that international exposure of a firm leads to a decrease in CSR activities in the home country. It further posits that CEO duality also negatively affects CSR activities in the home country. Further, the proposed moderation hypotheses argue that the negative effects of international exposure of a firm on CSR activities in the home country are stronger for firms with CEO duality as compared to non-duality. The proposed hypotheses are tested with data from 240 publicly listed Chinese firms between 2008 and 2016, consisting of 1920 firm-years. The panel data is analysed using Linear Mixed Modelling (LMM) with the SPSS software. The findings support all the proposed hypotheses. This study makes three key contributions. Firstly, the study uses the institutional theory and agency theory to provide evidence for the negative effects of international exposure of a firm and CEO duality on CSR activities in the home country. Secondly, it enhances the understanding of how CEO duality acts as a boundary condition between international exposure of a firm and CSR relationships. Thirdly, it contributes to the emerging economy multinational enterprises literature by enhancing understanding of the proposed relationships in the context of the Chinese corporate sector.</p>

Corporate Governance and Risk Disclosure in Emerging Countries

The study examines the influence of corporate governance attributes on the corporate risk disclosure in the emerging countries. Board size, non-executive directors, independent directors, board diversity and CEO-duality are the important board of director’s composition that is considered as corporate governance variables for this study. The study focuses on South Africa and Nigeria as these countries are among major players in the African emerging market. The sample comprises 42 financial and non-financial firms listed in Nigerian Stock Exchange and Johannesburg Stock Exchange. The data was drawn from 192 annual reports for the year 2014–2018. The analytical tools employed are manual content analysis and regression. The empirical results show that operational risk disclosure outweighs environmental and strategic risk disclosure. Meanwhile, past information, non-monetary and good news are considered less relevant, however dominatefuture, monetary and bad news which are more valuable to diverse stakeholders. Moreover, in considering the important factors that impact on the risk confession, that board size, independent director and diversity have greater influence in driving the risk disclosure upward. Nevertheless, non-executive director and CEO-Duality are statistically insignificant in determining the movement of risk information to divulge. The persistence of contemporary corporate risk practice jampacked with irrelevant information might promote greater agency cost. The implication for the current practice might increase investors’ uncertainty which in turn would raise the company cost of capital. This issue could be addressed by regulating risk disclosure in emerging countries instead of allowing corporate managers to report risk related information at their discretion. Corporate manager are also encourage to appreciate all the potential risk disclosure drivers in the African emerging countries.

Do CEO Duality and Ownership Concentration Impact Dividend Policy in Emerging Markets? The Moderating Effect of Crises Period

Despite developments of recent theoretical and numerous empirical studies on the policies effectively adopted by companies, the dividend distribution policy (DDP) remains largely unexplained. In this regard, the main purpose of the current study is to empirically examine the effects of both CEO duality and ownership concentration on DDP during a crisis period. Furthermore, we test, using an interaction variable, the moderating effect of the crisis period on the association between both the degree of CEO duality and the ownership concentration on the DDP by analyzing panel data on selected listed firms in an emerging economy, namely, Tunisia. Based on a sample made up of 576 firm-year observations over the period 1996–2019, the findings of this research indicate that the crisis period plays an important role in mitigating the positive effect of both CEO duality and ownership concentration on DDP. The findings confirm furthermore that the crisis period on the one hand and both CEO duality and ownership concentration on the other represent two competing forces influencing DDP. Our results also support the agency theory on which DDP depends, among other things, family ownership, board and company size, and ROE.