Abstract
Two divergent theories emerge from the literature on CEO duality. The agency theory advocates that a dual CEO negatively affects corporate performance, because it compromises the monitoring and control of the CEO, whilst the stewardship theory suggests the contrary effect due to the unity of command it presents. For a sample of 26 non-financial listed Portuguese firms from 2002 to 2016, this study draws on agency and stewardship theories to evaluate the relationship between CEO duality and firm performance, proxied by Tobin's Q. Using ordinary least square (OLS) and two stage least squares (2SLS) techniques to control potential problems simultaneity between CEO duality and firm performance, the author finds a negative relationship between CEO duality and Tobin's Q. This suggests that investors perceive no value in having a concentration of power with a dual leadership structure. Therefore, this study recommends that the positions of chairman and CEO should be separated for listed Portuguese firms.
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