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Corporate Governance Mechanisms and Financial Performance: CEO Duality in Shipping Firms

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  • Theodore Syriopoulos
  • Michael Tsatsaronis

Abstract

The paper investigates the impact of CEO duality/separation on the financial performance of shipping firms. This is an interesting case sector, as a growing number of shipping companies are seen to go public on international capital markets, shifting away from their founding family-run model. Agency and stewardship theories put forward conflicting arguments in favor or against CEO duality/separation. CEO separation (choice of different persons to serve as CEO and Chairman) is argued to be a good corporate governance practice for shareholders’ interests, facilitates the effective monitoring and control of top management and improves the financial performance of the firm (agency theory). On the other hand, CEO duality establishes a uniform command chain and minimizes conflicting decision-taking and also supports financial performance (stewardship theory). Past empirical findings have produced contradictory evidence as to CEO duality/separation implications for financial performance. These issues have not been adequately researched in shipping business and the paper attempts to partially fill this gap. CEO separation is found to exert a positive impact on the financial performance of shipping firms, in support of agency theory. Copyright Eurasia Business and Economics Society 2012

Suggested Citation

  • Theodore Syriopoulos & Michael Tsatsaronis, 2012. "Corporate Governance Mechanisms and Financial Performance: CEO Duality in Shipping Firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 2(1), pages 1-30, June.
  • Handle: RePEc:spr:eurasi:v:2:y:2012:i:1:p:1-30
    DOI: 10.14208/BF03353805
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    Cited by:

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    2. Mehmet Huseyin Bilgin & Giray Gozgor & Chi Keung Marco Lau, 2017. "Institutions and gravity model: the role of political economy and corporate governance," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(3), pages 421-436, December.
    3. Ankur Shukla & N. Sivasankaran & Shilpee A Dasgupta, 2018. "Do Board Characteristics Impact the Market Performance of Indian Banks?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(11), pages 1365-1383, November.
    4. Alexandridis, George & Kavussanos, Manolis G. & Kim, Chi Y. & Tsouknidis, Dimitris A. & Visvikis, Ilias D., 2018. "A survey of shipping finance research: Setting the future research agenda," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 164-212.
    5. Leonard Wang & Tien-Der Han, 2015. "Better governance matters optimal privatization policy," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 189-206, December.
    6. Samet Günay, 2017. "Value at risk (VaR) analysis for fat tails and long memory in returns," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 7(2), pages 215-230, August.
    7. Tanweer Hasan & Shakil Quayes & Baqui Khalily, 2019. "Role of governance on performance of microfinance institutions in Bangladesh," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(1), pages 91-106, March.

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    More about this item

    Keywords

    CEO Duality/Separation; Corporate Governance Mechanisms; Shipping Firms; Agency/Stewardship Theory; G32; G34; G38;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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