The Chairman of the Board – Leader or Lame Duck? An Empirical Analysis of the Importance of the Chairman in US Firms

Abstract

Academic literature generally views the chairman of the board as a mere additional title for the CEO. I critically review this concept and explore a distinct chairman effect on company performance. For this purpose, I examine policy variable changes and stock market reactions to chairman turnovers for large US companies between 1998 and 2012. I find that chairman-CEOs are more entrenched and preserve their empire until their retirement. The chairman has only limited relevance to large companies, but for small companies, the chairman provides valuable knowledge and guidance.

Keywords: Chairman of the Board; Duality; Entrenchment

Australian Academy of Accounting and , volume 6, issue 1, January 2024, pp 1-67