Abstract
The objective of this study is to examine the effects of corporate governance mechanisms on Chief Executive Officer (CEO) Duality in the food industry of companies listed in the Tehran Stock Exchange (TSE).There are several aspects and dimensions of corporate governance, which may influence a CEO Duality but this study focused on three aspects namely Ownership Concentration (OWNCON); Institutional Ownership (INOWN) and Board's Independence (BOIN). This study utilizes a panel data analysis of 47 firms over a four-year period from years 2008 to 2011. In this study, log of total assets (SIZE) and total debt divided by total assets (LEV) are control variables. A logistic regression analysis is used to test the hypotheses. The results show has a positive and significant relationship between Ownership Concentration; Institutional Ownership; Board's Independence; Leverage and Chief Executive Officer Duality. Also, there is a negative and significant relationship between size and Chief Executive Officer Duality.
Highlights
According to the Cadbury Report (U.K.), corporate governance is defined as the “system by which businesses are directed and controlled (Cadbury, 1992).” In other words, corporate governance is a general set of customs, regulations, habits and laws that determine how a firm should be run.“Corporate governance is a set of relationships between a company’s management, its board, its shareholders and other stakeholders
The food industry of companies accepted into the Tehran Stock Exchange (TSE) of Iran has been selected for this study to examine the effects of corporate governance mechanisms namely Ownership Concentration and Institutional Ownership on Chief Executive Officer (CEO) Duality
Research hypotheses: In order to evaluate the effects of corporate governance mechanisms on CEO duality, hypotheses are tested: H1 : There is a significant relationship between ownership concentration and CEO duality in food industry accepted companies in Tehran Stock Exchange
Summary
According to the Cadbury Report (U.K.), corporate governance is defined as the “system by which businesses are directed and controlled (Cadbury, 1992).” In other words, corporate governance is a general set of customs, regulations, habits and laws that determine how a firm should be run.“Corporate governance is a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance provides the structure through which the objectives of the company are set and the means of attaining those objectives and monitoring performance are determined (Hand et al, 2004).”. The primary concerns of internal mechanisms are the boards of directors which monitors management operations and processes, while the external mechanisms include ownership structure, protection of minority shareholders, legal infrastructure and market for corporate control (Gillan, 2006). There is little by way of evidence on Corporate Governance and CEO duality. The evidence on the relation between CEO duality and Corporate Governance is mixed. The food industry of companies accepted into the Tehran Stock Exchange (TSE) of Iran has been selected for this study to examine the effects of corporate governance mechanisms namely Ownership Concentration and Institutional Ownership on CEO Duality
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