Abstract
This research linked the CEO duality and firm performance relationship and analyzed the moderating role of the resource dependence theory, in terms of CEO informal power and board involvement. Integrating agency, stewardship, and resource dependence theories, hypotheses were tested using corporate governance data collected from 212 listed companies, encompassing 20 industries in Sri Lanka. Findings supported in favor of the agency theory, determining that CEO duality has a negative impact on firm performance when the CEO is equipped with additional informal powers while duality exists. On the other hand, CEO duality reveals a positive impact on firm performance in circumstances where board involvement is considerably high, in terms of collaboration and control of agency, stewardship, and resource dependence theories. Thus, findings of this study support for both major theoretical perspectives depending on the numerous resources provided by the CEO and board of directors. In particular, given special reference to emerging economies, recent corporate governance implications on CEO duality- firm performance relationship are also addressed.
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