Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85345
Authors: 
Kempf, Alexander
Pütz, Alexander
Sonnenburg, Florian
Year of Publication: 
2013
Series/Report no.: 
CFR Working Paper 12-06 [rev.]
Abstract: 
We study the decisions and performance of managers who are also chair of the board (duality managers). We hypothesize that duality managers take more risky decisions and deliver worse performance than non-duality managers due to reduced level of control and replacement risk. Using the mutual fund industry as our laboratory we provide strong support for these hypotheses: Duality managers take risk that they could easily avoid, deviate from their benchmarks, make extreme decisions, and, consequently, deliver extreme performance outcomes. Furthermore, their average underperformance is 2.5 percent. All effects are the stronger, the more power the manager has in the board.
Subjects: 
Manager duality
governance
managerial decisions
agency conflicts
mutual funds
JEL: 
G23
G34
Document Type: 
Working Paper

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