Is CEO duality good or bad?
Agency theory suggests that CEO duality is bad for performance because it compromises the monitoring and control of the CEO.
Stewardship theory, in contrast, argues that CEO duality may be good for performance due to the unity of command it presents..
What does CEO duality mean?
CEO duality occurs when the same person holds both the CEO. and board chairperson positions in a corporation (Rechner & Dalton, 1991). CEO duality has opposing effects that boards must attempt to balance.
Why the role of chairman and CEO should be separated?
In an ideal corporate world, there would be input from two strong minds on the board – an executive salaried CEO and an independent non-executive Chairman. Indeed, separating the chair and CEO roles can promote overall board independence while allowing the CEO to focus on the everyday demands of managing a company.
Can you be both chairman and CEO?
In many companies, the chief executive officer (CEO), who holds the top management position in the company, also serves as chairman of the board. This is often the case with companies that have grown rapidly and still retain the initial founder in those roles.