HCCG: "Does combining the roles of CEO and chair cause poor performance"

Research seminar by Prof. Harley "Chip" Ryan, J. Mack Robinson College of Business at Georgia State University

Date and time: March 16, 14.30-16.00

Venue: Futurum, Hanken School of Economics

Harley Ryan has studied together with co-researchers over 22,000 firm-year observations from 1995-2010 to investigate whether combining roles of CEO and board-chair causes poor performance. Their research design allows reconciling conflicting evidence in the literature about whether CEO-chair duality impacts shareholder value. CEOs are awarded the additional title of board-chair following superior firm performance. A naïve analysis indicates a drop in firm performance following CEO promotion to chair. However, a research design that controls for the propensity to combine roles and performance mean-reversion reveals no post-appointment underperformance. Consistent with a learning explanation, investors react positively to combining both roles early in CEO’s tenure, but exhibit no reaction to combinations later in CEO’s tenure.

The research seminar is open for all interested.

Organiser: HCCG