On the choice of CEO duality : evidence from a mandatory disclosure rule

We adopt a novel approach to explain why firms opt for or against CEO duality and the value implications of this choice. Exploiting the 2009 amendments to Regulation S-K, we provide unique evidence on the first-time disclosure of the reasons firms state for combining (separating) the roles of CEO and chairman. The stated reasons support both agency theory and organization theory. They are more numerous and comprise more words, including more positive words, for firms with duality. Examining the announcement returns to firms' disclosures, we find that investors evaluate the main reasons for CEO duality by considering the firm's characteristics.