Competition for Managers and Corporate Governance

Competition for Managers and Corporate Governance

Viral Acharya, Marc Gabarro, Paolo Volpin

Series number :

Serial Number: 

Date posted :

December 01 2013

Last revised :

November 25 2018
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  • Corporate governance • 
  • executive compensation • 
  • Externalities

Separation between CEO and Chairman of the Board is typically viewed as evidence of good corporate governance. Surprisingly, the literature has failed so far to uncover any significant relation between CEO/Chairman duality and firm performance.

By distinguishing between periods with and without CEO turnover, we empirically identify two offsetting effects: the correlation between duality and performance is positive around CEO turnover and negative otherwise. This suggests that the competition for managerial talent forces firms to combine CEO and Chairman in order to attract more skilled CEOs at the cost of reducing governance standards.


Fellow, Research Member
Leonard N. Stern School of Business, New York University
Real name:
Marc Gabarro