"CEO Duality Dynamics: Assessing Financial Performance in Corporate Governance"

Abstract

In today's corporate world, the importance of corporate governance has led to a focused examination of company board structures and the pivotal role played by CEOs. This scrutiny arises from the CEO's crucial involvement in a multitude of areas including board dynamics, the promotion of transparency, fostering shareholder engagement, ensuring accountability, embracing gender diversity within leadership, cultivating stakeholder relations, strategic oversight, enhancing risk management, fortifying internal controls, and managing the company's reputation. The practice of leadership dualism, where an individual simultaneously occupies the roles of CEO and board Chairman, is a subject of debate. While this leadership model is favored in emerging markets, it is generally prohibited in more developed economies that operate with two-tier board systems. Despite the Indian Companies Act of 2013 introducing reforms aimed at strengthening corporate governance by overhauling board practices, the dual role of CEOs remains unaddressed in the current legal framework. This research delves into the effects of a CEO holding dual roles on the financial outcomes of companies in India. The analysis reveals that the financial performance of companies does not show a clear correlation with the practice of leadership dualism.