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One Man Two Hats: What's All the Commotion!

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  • Jay Dahya
  • Laura Galguera Garcia
  • Jos Van Bommel

Abstract

We examine performance in publicly listed U.K. companies over a period that encompasses the issuance of the Cadbury Committee's Code of Best Practice, which calls for the abolition of the combined CEO/COB position. We find that companies splitting the combined CEO/COB position to conform to the Code's requirement did not exhibit any absolute or relative improvement in performance when compared to various peer‐group benchmarks. We do not necessarily scoff at mandated board structures, but the evidence suggests that this particular legislature coerced the abandonment of the combined CEO/COB position and appears to be wide of the mark.

Suggested Citation

  • Jay Dahya & Laura Galguera Garcia & Jos Van Bommel, 2009. "One Man Two Hats: What's All the Commotion!," The Financial Review, Eastern Finance Association, vol. 44(2), pages 179-212, May.
    • Handle: RePEc:bla:finrev:v:44:y:2009:i:2:p:179-212
    DOI: 10.1111/j.1540-6288.2009.00215.x
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    Cited by:

    1. Tirthankar Nag & Chanchal Chatterjee, 2020. "Exploring Linkages Between Corporate Governance and Business Performance: Does Good Corporate Governance Lead to Enhanced Business Value?," South Asian Survey, , vol. 27(1), pages 37-61, March.
    2. Ayman Mohamed Zerban & Wael Bahaa El Din Ateia, 2016. "Corporate Governance in the Banking Sector (Empirical Study on the Effect of Separating Chairman and Chief Executive Officer (CEO) Positions on Financial Performance)," Accounting and Finance Research, Sciedu Press, vol. 5(3), pages 1-37, August.
    3. Tosun, Onur Kemal, 2021. "Changes in corporate governance: Externally dictated vs voluntarily determined," International Review of Financial Analysis, Elsevier, vol. 73(C).
    4. Su-Lien Lu & Ying-Hui Li, 2019. "Effect of Corporate Governance on Institutional Investors’ Preferences: An Empirical Investigation in Taiwan," JRFM, MDPI, vol. 12(1), pages 1-21, February.
    5. Zona, Fabio, 2014. "Board leadership structure and diversity over CEO time in office: A test of the evolutionary perspective on Italian firms," European Management Journal, Elsevier, vol. 32(4), pages 672-681.
    6. Yang, Tina & Zhao, Shan, 2014. "CEO duality and firm performance: Evidence from an exogenous shock to the competitive environment," Journal of Banking & Finance, Elsevier, vol. 49(C), pages 534-552.
    7. Pucheta-Martínez, María Consuelo, 2015. "El papel del Consejo de Administración en la creación de valor en la empresa," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 18(2), pages 148-161.
    8. Minibhavan Chandrasekharan Minimol & Phuong Lan Khong, 2021. "Gender Diversity and Firm Performance: Evidences from Emerging Markets," Economic Research Guardian, Weissberg Publishing, vol. 11(1), pages 156-169, June.
    9. María Consuelo Pucheta-Martínez & Isabel Gallego-Álvarez, 2020. "Do board characteristics drive firm performance? An international perspective," Review of Managerial Science, Springer, vol. 14(6), pages 1251-1297, December.
    10. Dedman, Elisabeth, 2016. "CEO succession in the UK: An analysis of the effect of censuring the CEO-to-chair move in the Combined Code on Corporate Governance 2003," The British Accounting Review, Elsevier, vol. 48(3), pages 359-378.

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