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Article
It Takes Two: The Incidence and Effectiveness of Co-CEOs
The Financial Review
  • Matteo Arena, Marquette University
  • Stephen P Ferris, University of Missouri - Columbia
  • Emre Unlu, University of Nebraska-Lincoln
Document Type
Article
Language
eng
Format of Original
28 p.
Publication Date
1-1-2011
Publisher
Wiley
Abstract

This study examines the phenomenon of co-CEOs within publicly traded firms. Although shared executive leadership is not widespread, it occurs within some very prominent firms. We find that co-CEOs generally complement each other in terms of educational background or executive responsibilities. Our results show that firms most likely to appoint co-CEOs have lower leverage, a more limited firm focus, less independent board structure, fewer advising directors, lower institutional ownership and greater levels of merger activity. The governance structure of co-CEO firms suggest that co-CEOships can serve as an alternative governance mechanism, with co-CEO mutual monitoring substituting for board or external monitoring and co-CEO complementary skills substituting for board advising. An event study indicates that the market reacts positively to appointments of co-CEOs while a propensity score analysis shows that the presence of co-CEOs increases firm valuation.

Comments

Financial Review, Vol. 46 (2011): 383-410. Permalink.

This publication was previously a working paper, which can be found as: (WP 2011-01).

Citation Information
Matteo Arena, Stephen P Ferris and Emre Unlu. "It Takes Two: The Incidence and Effectiveness of Co-CEOs" The Financial Review (2011) ISSN: 0732-8516
Available at: http://works.bepress.com/matteo_arena/18/