CEO Duality e performance. Il ruolo del controllo familiare in periodi di crisi

There are several studies in the literature which analyse the effect of CEO duality on corporate performance, reaching mixed conclusions. Using agency theory, stewardship theory and socio-emotional wealth theory perspectives, we examine the relationship between CEO duality and the performance of Italian publicly listed companies over the period 2003–2013. In addition, considering the presence of conflicting empirical evidence, which could lead to a positive effect rather than a negative one, the role of moderating factors related to family control, before and during the recent financial crisis, is investigated. Specifically, similar to Villalonga and Amit (2006) we classify our sample firms in three different categories: firstly, family firms when either both the founder and/or family members hold more than 25% of the shares; secondly, if the founding family owns less than 25% of the shares, the family must perform the role of CEO and/or Chairman of the board, family involvement in management (FIM), when the firms are managed, both in the role of CEO and Chairman, by family members; lastly, family involvement in ownership, when the family assumes a passive role and the firms are run by external professional managers. The results, without considering the role of family control as moderating factors, show a negative effect of dual leadership on performance, in line with the point of view of agency theory. In both empirical analyses, considering the overall period of the study from 2003 to 2013 covering the periods of pre-crisis and during crisis, the presence of CEO duality in Italian firms leads to reduced performance. However, focusing on family firms only, we observe that family CEO duality increases the performance of firms during the financial and economic crisis. On the contrary, in the pre-crisis period family CEO duality seems unable to affect firm performance. Family CEO/Chairman power becomes increasingly beneficial because concentrated power allows the firm to respond more rapidly to the crisis. Specifically, we observe that duality has a positive influence on performance when both the roles of CEO and Chairman belong to a single family member (family involvement in management).On the contrary, CEO duality in “passive” firms, when families have just the role of large shareholder, does not influence the performance. These different results allow us to state that the benefits described by the stewardship theory and socio-emotional wealth theory, in terms of strong sense of responsibility and a faster decision-making process in order to react quickly to external dangers to save the company from potential bankruptcy, outweigh the benefits of a better control on managers assumed by agency theory. The paper contributes to the literature on CEO duality and firm performance by introducing a framework for identifying and analysing three different family moderating variables that affect the relationship between CEO duality and firm performance. Our study confirms the advantages of family control in a period of crisis and highlights the importance of family firms for Italy.