CONTENT ANALYSIS OF THE EFFECT OF CEO DUALITY ON THE CORPORATE PERFORMANCE OF QUOTED COMPANIES ON THE NIGERIAN STOCK EXCHANGE 2006 -2012
Journal Title: European Journal of Business and Social Sciences - Year 2013, Vol 2, Issue 6
Abstract
The Chief Executive Officer (CEO) of a corporate entity is its Chief Accounting Officer. He is at the head of management which according to Miller (2005) is more of hands on activity; conducting and supervising actions with the judicious use of means to accomplish certain goal/s. The Chairman of the Board of Directors on the other hand is the chief policy or law maker of the enterprise. CEO Duality occurs when the CEO is equally the Chairman of the company or Board of Directors. Since the position of a CEO is a critical element of corporate governance of a company, a combination of the roles of CEO and chairman of the company could have far reaching implications on stewardship accounting and corporate governance and by extension corporate performance. The spate of corporate failures in recent time calls for serious examination of their causes and possible solution. Essentially, poor corporate governance has been implicated in most corporate failures in and outside Nigeria and the position and role of the CEO is a critical element of this. The first part of this paper surveyed the opinions of corporate managers and Accountants on the role of CEO-duality on corporate governance and performance of quoted companies and found out that these respondents perceive the role as significant. This second step in the study uses the actual performances of these companies to analyze this problem. It uses secondary data on Return on Equity and Profit Margin collected from Annual Reports of these companies. It uses the Micro soft Special Package for Social Sciences (SPSS) to perform a test of significant difference between two means. It therefore tests the hypothesis that, there is a significant difference between the mean performances of quoted companies with Ceo-duality and those without Ceo duality in Nigeria. At a 5% significant level, the hypothesis is accepted. Thus, this content analysis in addition to confirming the earlier study conclusion that Ceo duality has a significant impact on the corporate performance of quoted companies in Nigeria and that the average performance of the former was statistically and significantly lower than the average performance of the later. It was therefore recommended that as a veritable means of strengthening corporate governance and enhancing performance, CEO duality should be minimized/reduced as much as possible. Chairmen of companies should not double as Chief Executive Officers.
Authors and Affiliations
Prof. U. Modum| Department of Accountancy Faculty of Business Administration University of Nigsseria Enugu Campus, Dr. Robinson O. Ugwoke| Department of Accountancy Faculty of Business Administration University of Nigsseria Enugu Campus, Dr. Edith O. Onyeanu| Department of Accountancy Faculty of Business Administration University of Nigeria Enugu Campus
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