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Does the South African stock market value an independent dual board leadership structure?

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  • Collins Gyakari Ntim

Abstract

We examine the crucial policy question of whether the South African (SA) stock market values a dual board leadership structure (DBLS) using a sample of 169 listed firms from 2002 to 2007. We find a significant positive link between DBLS and market valuation, but only in firms with independent chairpersons, implying that the market values firms with independent DBLS more highly. Our results are robust across a number of econometric models that control for different types of market valuation proxies and endogeneity problems. Our findings offer empirical support for agency theory, which suggests that independent DBLS increases the capacity of the board to effectively advise, monitor and discipline top management, and thereby improving market valuation.

Suggested Citation

  • Collins Gyakari Ntim, 2012. "Does the South African stock market value an independent dual board leadership structure?," Economics and Business Letters, Oviedo University Press, vol. 1(1), pages 35-45.
    • Handle: RePEc:ove:journl:aid:9354
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    2. Sunaina Kanojia & Bunny Singh Bhatia, 2022. "Corporate governance and dividend policy of the US and Indian companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(4), pages 1339-1373, December.
    3. repec:thr:techub:v:2:y:2022:i:3:p:6-22 is not listed on IDEAS
    4. Ali M. Gerged & Babikir Bechir Mahamat & Ibrahim K. Elmghaamez, 2020. "Did corporate governance compliance have an impact on auditor selection and quality? Evidence from FTSE 350," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(2), pages 51-60, September.
    5. Omar Farooq & Zakir Pashayev, 2019. "Capital structure and board of directors: a quintile regression approach," Economics and Business Letters, Oviedo University Press, vol. 8(3), pages 130-137.

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