In choosing sides concerning CEO duality,two schools of thought exist.Which of the following would not be a consideration for the agency theory school of thought?

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CEO duality is one of the most controversial issues in corporate governance. It refers to the dual leadership structure where the CEO acts simultaneously as the chair of the board of directors. Supporters of agency theory argue that the positions of CEO and chairman should be separate. The case for separation is based on the simple principle of the separation of power. Duality also complicates the issue of CEO succession. Duality also serves to reinforce popular doubts about the legitimacy of the system as a whole and evokes images of bosses writing their own performance reviews and setting their own salaries. When the positions are broken apart, there is a clear shift in the performance of the firm. If the firm has been doing well, its performance declines after the separation. If the firm has been doing poorly, it experiences improvement after separating the two roles.

In Choosing Sides Concerning CEO Duality,two Schools of Thought Exist