Some firms combine CEO and board chair positions after observing CEO performance. We propose that this approach, known as “passing the baton” (PTB), enables the board to learn about the ability and suitability of the CEO before awarding additional title of board chair. Consistent with learning, idiosyncratic stock-return volatility declines following the CEO–chair combination. The market responds positively (Cumulative Abnormal Return (CAR) = 1.31%) to early promotions, suggesting that early promotions reveal directors’ private information about CEO quality. Compared to a matched benchmark, we observe no decline in firm's accounting performance in subsequent years. Although match-adjusted stock returns begin to decline 2 years after combination in homogeneous industries, there is no stock-return decline in heterogeneous industries where learning is more important. The evidence reveals the potential for entrenchment over time, but we find no evidence to suggest that CEO–chair combinations in PTB firms result from agency problems. Our results underscore the importance of balancing both learning and agency problems in corporate governance.

中文翻译：

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学习和讨价还价对 CEO-主席二元性的影响：来自接力棒公司的证据

一些公司在观察 CEO 的表现后将 CEO 和董事会主席的职位结合起来。我们建议，这种被称为“传递接力棒”（PTB）的方法使董事会能够在授予董事会主席额外头衔之前了解 CEO 的能力和适合性。与学习一致，在 CEO 兼主席合并后，股票收益率的波动率会下降。市场对早期晋升反应积极（累积异常回报率 (CAR) = 1.31%），这表明早期晋升暴露了董事关于 CEO 素质的私人信息。与匹配的基准相比，我们观察到公司在随后几年的会计业绩没有下降。尽管在同质行业合并 2 年后匹配调整后的股票收益开始下降，在学习更重要的异质行业中，股票收益没有下降。证据揭示了随着时间的推移巩固的可能性，但我们没有发现证据表明 PTB 公司的 CEO 和主席组合是由代理问题引起的。我们的结果强调了在公司治理中平衡学习和代理问题的重要性。