ABSTRACT
Stewardship theory suggests that CEO duality can provide strong leadership and facilitate the development and coordination of firm strategy. These benefits should affect firm risk and financial performance, particularly when the firm has high information-gathering costs. We use the 2020 coronavirus outbreak as a natural experiment to determine whether CEO duality is beneficial during crisis periods. We find that in 2020, S&P 1500 firms with CEO duality exhibit smaller increases in default probability risk than firms with non-duality in the presence of high information costs. Firms with CEO duality experience a smaller decrease in profitability when information costs are high. We also find that firms with CEO duality offer cumulative abnormal returns significantly higher than those of other firms. CEO duality is more valuable in firms with higher information costs. Our results indicate that CEO duality is valuable during crisis periods, particularly when information costs are high. These results are consistent with stewardship theory and indicate that the concentration of power from CEO duality is beneficial during crisis periods.
ABSTRACT
This paper analyzes the impact of COVID-19 on firm-level stock behaviors (including stock price volatility, trading volume and stock returns). Using US data, this paper examines whether confirmed cases (and deaths) of COVID-19 or COVID-19-associated online searches affect stock behaviors. The results show that our five COVID-19 proxies are all positively associated with stock price volatility and trading volume and negatively associ-ated with stock returns. This paper further investigates the mitigating effect of corporate governance (viz., board and ownership structures) in this COVID-19 crisis. Overall, the results suggest that good corporate governance can mitigate the impact of COVID-19 on stock price volatility and trading volume but may not help to enhance stock returns. This paper also considers key policies used to tackle the COVID-19 pandemic and finds that government intervention plays an important role in stabilizing stock markets in this COVID-19 crisis. (c) 2021 Elsevier Inc. All rights reserved.
ABSTRACT
The transition from the industrial economy to the knowledge-based economy has changed the status quo, and consequently, intangibles have gained traction in the scientific discourse of recent decades. The paper aims to scrutinise, econometrically, the nexus between intangibles and firm performance and the moderating role of CEO duality and CEO gender. Capital-intensive industries are largely overlooked by previous studies, which prompted us to explore the electricity and gas industry. The analysis is based on a longitudinal dataset of EU-listed companies and employs a quantitative approach to study the causal relationships between intangibles, firm performance, and CEO characteristics. Results demonstrate that intangible assets are a stepping stone to better financial and market performance, which endorses the resource-based view. Today’s social and cultural milieu sees gender diversity in a positive light. Consonant with the upper echelons theory, the study finds that CEO gender positively impacts the intangibles–firm performance relationship. The hypothesised prejudicial effect of CEO duality, postulated by the agency theory, is only partially supported. Managers and policymakers are advised to pay particular attention to intangibles and science-driven projects to augment corporate performance. Creating a diversity-friendly culture is also of paramount importance.
ABSTRACT
The purpose of this paper is to answer the question of whether corporate governance in terms of gender structure of client corporate boards and CEO duality impact client's incentive and ability to engage in high-qualityaudit in companies a year before the Covid outbreak. Private and public corporations are included in the sample and statistical analysis is applied on auditor reports and client board characteristics (gender and independence) to find the existing relationships. The study revealed that client boards are more male-dominated, with much of them having CEO duality experience and therefore more being prone to engage a local auditor, much less to engage an international auditor, and reports are signed by a male auditor in more of the cases. Results also support the fact that auditing companies have been paying attention to gender issues with half of the auditors signing the report being female. It was found that gender composition of client board and CEO duality and audit opinion are not interrelated which is in line with other studies. The paper extends the growing literature on the linkage between audit quality board characteristics and it overcomes the limitation observed in previous studies by testing the idea that gender and independence are variables of primary influence on auditor engagement. © 2022, Goce Delchev University of Shtip. All rights reserved.
ABSTRACT
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.