Owner Board Chairs

We study the impact of owner board chairs—namely, when an individual is simultaneously the largest owner and the board chair of a firm—on firm growth. Upon disentangling the phenomenon of owner board chairs into ownership concentration and board chair position, we find that ownership concentration in the hands of individuals by itself promotes firm growth. However, when ownership concentration is combined with the board chair position, firm growth is impaired, especially in the long run. Examining the causal mechanism underlying this negative effect, we find that owner board chairs engender controversies with nonshareholding stakeholders. We find that executive ownership is effective in curbing the growth penalty from owner board chairs, whereas board independence is ineffective in doing so.