Is One Head Better Than Two? Dual Leadership and Firm Performance During the COVID‐19 Crisis

Md Reiazul Haque, Md Lutfur Rahman and Mohammed Abdullah Al Mamun

Abacus, 2024, vol. 60, issue 2, 236-271

Abstract: We provide novel evidence on the value of combined CEO and board chair positions (CEO duality) for firms during the COVID‐19 pandemic in 2020. Based on 4,840 firm‐quarter observations from 1,210 unique firms in the US, we show that CEO duality firms outperformed non‐duality firms by a 0.58% margin in quarterly return on assets in 2020, which is equivalent to an incremental annual net profit of US$164 million. A difference‐in‐difference estimation confirms that the benefit of CEO duality is observed only in the COVID‐19 crisis period. Our main finding is robust to potential endogeneity concerns and alternative performance measures. Additional analyses show that the positive impact of CEO duality stems from the mechanisms of operating cost savings and working capital optimization during the crisis. Our finding underscores the benefit of CEO duality when economic uncertainty is high and a speedy decision is important.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/abac.12319

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:abacus:v:60:y:2024:i:2:p:236-271

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0001-3072

Access Statistics for this article

Abacus is currently edited by G.W. Dean and S. Jones

More articles in Abacus from Accounting Foundation, University of Sydney
Bibliographic data for series maintained by Wiley Content Delivery ().