Agency and stewardship theories suggest diverging approaches as to the implications of the duality mechanism. Separation of the Board of Directors' Chairman and CEO positions facilitates a more effective monitoring and control of the CEO, and firms failing to do so may underperform. On the other hand, counter-arguments postulate that CEO duality may not induce positive implications for firms' financial performance, due to the absence of unifrom command chain and the avoidance of conflicting decision-taking. Past empirical findings have produced contradictory evidence as to whether CEO duality can have positive impications for the firm.
Based on this framework, the paper proceeds to investigate the hypothesis of CEO duality and its impact on shipping firms' financial performance. This issue has not been investigated in the field of shipping business before. We are going to impelement an armoury of financail econometric techniques on a cross-sectional panel data framework to study these issues. As more shipping firms decide to go publicly listed on international capital markets, their top management model shifts from a family-based to a multi-shareholder based approach, adopting the CEO duality mechanism to improve financial perfromance.