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Does the South African stock market values independent dual board leadership structure?

Ntim, Collins G. (2012) Does the South African stock market values independent dual board leadership structure? Economics and Business Letters, 1, (1), pp. 35-45.

Record type: Article


We examine the crucial policy question of whether the South African (SA) stock market values a dual board leadership structure (DBLS) using a sample of 169 listed firms from 2002 to 2007. We find a significant positive link between DBLS and market valuation, but only in firms with independent chairpersons, implying that the market values firms with independent DBLS more highly. Our results are robust across a number of econometric models that control for different types of market valuation proxies and endogeneity problems. Our findings offer empirical support for agency theory, which suggests that independent DBLS increases the capacity of the board to effectively advise, monitor and discipline top management, and thereby improving market valuation.

Keywords: corporate governance; independent dual board leadership structure; market valuation; King Reports; South Africa; endogeneity

JEL classification: G12, G34, G38

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Published date: March 2012
Keywords: corporate governance, independent dual board leadership structure, market valuation, King Reports, South Africa, endogeneity
Organisations: Centre of Excellence for International Banking, Finance & Accounting, Accounting


Local EPrints ID: 343113
ISSN: 2254-4380
PURE UUID: 343093ad-a911-406f-af8b-08e09acaddb8

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Date deposited: 24 Sep 2012 14:18
Last modified: 18 Jul 2017 05:24

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