Board Antecedents of CEO Duality and the Moderating Role of Country-level Managerial Discretion: A Meta-analytic Investigation

CEO duality reduces boards' monitoring capacity. But governance substitution theory holds that boards of directors who can effectively monitor their CEOs are more likely to adopt the CEO duality governance structure. By examining relationships between board characteristics underlying their monitoring capacity and CEO duality, we bring evidence to bear on governance substitution theory. Further, by applying a managerial discretion theory lens to CEO duality, we extend governance substitution theory to the cross-country context where institutional features vary in their constraints on managerial discretion. Meta-analytic results from a dataset of 297 studies across 32 countries/regions provided support for the majority of our predictions. As predicted, board independence and certain types of board human capital were positively related to CEO duality. Unexpectedly, board ownership was negatively related to CEO duality. Additionally, country-level managerial discretion significantly moderated the board independence- and human capital-duality relationships (but not the board-ownership-duality relationship) as predicted.