CEO Duality, Board Monitoring, and Acquisition Performance: A Test of Competing Theories

Abstract

Our paper presents an empirical examination of the relationship betweenCEO duality and acquisition performance. Specifically, we address two relatedquestions involving CEO duality under the auspices of agency and stewardshiptheories. The first involves the extent to which CEO duality directly influencesthe profitability of acquisitions. The second involves the influence of duality andthe nature of outside board monitoring on acquisition performance. Our studytests competing hypotheses drawn from these two perspectives. We find thatCEO duality affects performance negatively and there is an important interactioneffect between outside board monitoring and CEO duality.