July 15, 2008

Journal to profile business scholars’ research

by Sun Min

CARBONDALE, Ill. -- Research conducted by scholars at Southern Illinois University Carbondale’s College of Business will be profiled in the Journal of Management and Governance, an internationally renowned publication dedicated to advancing the understanding of corporate governance issues within and throughout privately held firms, publicly held corporations and government-controlled organizations.

Henry J. Rehn Professor of Finance Wallace N. Davidson, Assistant Professor of Finance David A. Rakowski along with former doctoral students Yixi Ning and Eahab Elsaid, authored the paper entitled “The Antecedents of Simultaneous Appointment to CEO and Chair,” which covers the issue of duality.

“I was very happy to have had it accepted for publication,” said Davidson, who explained that when one person holds both the CEO and board chair position, this is called duality.

Duality is a common occurrence. Successful CEOs are promoted to CEO and chair. However, Davidson’s paper shows that boards seat one person into a dual role when there is a need for an unambiguous leader. That is, it tends to occur when there have been problems or company stresses creating a need for unified management and control of the firm. Therefore, the simultaneous appointments often occur after poor prior performance or when the CEO has been fired.

“Duality is a controversial issue,” said Davidson. “Many argue that since the board of directors’ job is to monitor management, having the head of the board also serving as the top manager is like the fox monitoring the hen house. However, duality is a common form of governance in the U.S. and usually occurs for successful CEOs. We show that it can occur in other circumstances. This should help to clarify the rationale for duality. The results should, therefore, be useful to other duality researchers, shareholder groups that oppose duality and regulators.”

Davidson received the 2007 SIUC "Excellence Through Commitment" award. He teaches corporate finance, working capital management, capital budgeting, financial statement analysis, financial theory and security valuation.

Davidson has produced many continuing education seminars and online classes for the Professional Development Institute and American Institute of CPAs.

Davidson earned bachelor's and master's degrees in 1974 and 1976 from Wright State University in Ohio and a doctorate in 1982 from The Ohio State University.

Rakowski teaches investments, international finance, corporate finance and financial institutions.

Rakowski joined the College of Business faculty in 2003. Before launching his academic career, he gained corporate experience at Delaware Investment Advisors in Philadelphia, Pa., and V. Alexander and Co. in Memphis, Tenn.

Rakowski earned a bachelor of business administration from Stetson University and a doctorate in finance from Georgia State University.