On the choice of CEO duality: Evidence from a mandatory disclosure rule
Peter Limbach and
No 18-06, CFR Working Papers from University of Cologne, Centre for Financial Research (CFR)
We adopt a novel approach to explain why firms opt for or against CEO duality and the value implications of this choice. Exploiting the 2009 amendments to Regulation S-K, we provide unique evidence on the first-time disclosure of the reasons firms state for combining (separating) the roles of CEO and chairman. The stated reasons support both agency theory and organization theory. They are more numerous and comprise more words, including more positive words, for firms with duality. Examining the announcement returns to firms' disclosures, we find that investors evaluate the main reasons for CEO duality by considering the firm's characteristics.
Keywords: CEO Duality; Board of Directors; Firm Valuation; Regulation S-K; Textual Analysis (search for similar items in EconPapers)
JEL-codes: G14 G34 G38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-cfn
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfrwps:1806
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