Should chairman and CEO be separated? : leadership structure and firm performance in Switzerland

Schmid, Markus and Zimmermann, Heinz. (2008) Should chairman and CEO be separated? : leadership structure and firm performance in Switzerland. Schmalenbach business review, 60. pp. 182-204.

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Official URL: http://edoc.unibas.ch/dok/A5250412

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We investigate the valuation effects of leadership structure in Switzerland where, in contrast to the U.S., a separation of the CEO and chairman functions is common. Consistent with the majority of prior research focusing on the U.S., we find no evidence of a systematic and significant difference in valuation between firms with combined and firms with separated functions. We also investigate whether the leadership structure is related to firm-level corporate governance characteristics. We find a curvilinear relation between leadership structure and managerial shareholdings that is similar to what we observe between firm value and managerial shareholdings. A possible interpretation is that the agency costs associated with a combined function are mitigated by a higher incentive alignment of the CEO/chairman through an adequate level of managerial shareholdings.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Finanzmarkttheorie (Zimmermann)
UniBasel Contributors:Zimmermann, Heinz
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:Verlagsgruppe Handelsblatt
Note:Publication type according to Uni Basel Research Database: Journal article
edoc DOI:
Last Modified:21 Nov 2017 07:52
Deposited On:22 Mar 2012 14:03

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