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Based on a sample of 290 large U.S. corporations, we find that dual positioning on both CEO and board chairperson positions at the corporate top leads to reduced firm risk-taking propensity, serving managerial risk minimization preferences. We also find empirical evidence that traditionally emphasized control mechanisms of board independence and managerial ownership are ineffective in controlling managerial behavior when CEO duality leadership exists. Additionally, the power balance obtained from concentrated shareholder ownership in the firm has significant impact on controlling managerial behavior regarding firm risk taking. The findings of this research contribute to reducing the controversy surrounding CEO duality leadership by furnishing empirical evidence of how CEO duality leadership in corporate governance structure affects managerial behavior in corporate strategic management.
Kim et al. (Sun,) studied this question.