Abstract

Purpose - The global financial crisis of 2008 raises many governance questions regarding the roles and responsibilities of executives and board members. Simultaneously, CEO duality in the US and elsewhere has come under renewed scrutiny because of the perceived loss of checks and balances and resultant abuse of power. We suggest that the financial crisis presents a unique opportunity to explore the effects of, and attitudes, to CEO Duality .We therefore investigate whether CEO duality is associated with bank failure and whether bank regulators, as can be expected, are opposed to CEO duality.Design/methodology/approach - We investigated the correlation between CEO duality and publicly-traded banks in the US that received Federal bailout funds, using available databases, and investigated bank regulators’ attitudes to CEO Duality using a series of structured interviews.Findings - We found no correlation between bank failure and CEO duality. We did however find a strong correlation between bank ownership and receipt of Federal bailout funds in that publically owned banks were far more likely to have received bailout funds than banks which were privately owned. We also found, surprisingly, that Regulators accepted CEO duality for several reasons and have no agenda to limit it.Practical implications - Our results suggest that CEO duality is a less significant issue factor in corporate management than suggested by many previous researchers and policy makers. This has clear implications for governance, regulation and legislation.Originality/value - This study is the first to investigate the relationship between bank performance and CEO duality. Our results suggest that whilst there may be many good reasons for limiting CEO duality, the key measure of adverse effects on corporate performance in this sector is not one of them.