This study addresses the questions of “How” and “When” CEO duality affects firm performance from a developing country’s perspective. To address the research question, CEO duality serves as an explanatory variable, board effectiveness as a mediator, CEO personal characteristics as moderator, firm-specific characteristics as control, and performance indicators as a dependent variable. Our dataset comprises 163 Pakistani firms listed on the Pakistan Stock Exchange for 2009 to 2018. Results demonstrate that CEO’s duality negatively affects a firm’s financial performance; however, board effectiveness mediates the link between CEO duality and firm performance. The results support the agency theory framework. Furthermore, findings proposed that the CEO’s attributes (age, gender, and financial education) significantly moderate the link between a CEO’s duality and firm performance. The findings may be generalized among the developing countries and net 11 ( N-11) specifically. The current study claims to be the first one that explores the mediating role of the board effectiveness and moderating role of the CEO personal attributes together on a duality-performance link employing Pakistan’s corporate data. The findings suggest that policymakers and regulators ensure separation of power between Chairman and CEO to assure transparency through induction of more independence in the board room.

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This paper empirically investigates the impact of cognitive board diversity in education, expertise, and tenure facets on financial distress likelihood in the emerging economy of China. This study examines how this relationship varies across State-Owned Enterprises (SOEs) and Non-State-Owned Enterprises (NSOEs). Paper argues that the Chinese stock market, as a typical emerging market, is an excellent laboratory for studying the impact of board diversity on the probability of financial distress. Its underdeveloped financial system and inadequate investor protection leave firms unprotected from financial hardship. A sample of 12,366 observations from 1,374 firms from 2010 to 2018 shows that cognitive diversity qualities are positively linked with Z-score, implying that directors with different educational backgrounds, financial skills, and tenures can assist in reducing the probability of financial distress. Cognitive board diversity reduces the likelihood of financial distress in SOEs and NSOEs. However, tenure diversity is insignificant in all cases. Furthermore, the robustness model “two-step system Generalized Methods of Moments (GMM)” demonstrated a positive association between educational diversity, financial expertise, and financial distress scores. The results have significant implications for researchers, managers, investors, regulators, and policymakers.