CEO Duality in Joint Stock Companies

In this research, we focus on analyzing the CEO duality system in Libya. Here, we discuss the advantages and disadvantages of this system. The study concluded that Libyan law in general (whether the Commercial Activity Law or the Governance Regulations) do not adopt the duality CEO system and left the decision of this issue to the Board of Directors or the General Assembly of the company. However, this study concluded that the position of the Libyan legislator is commendable with regard to small, medium and family companies. However, it saw that the system of separating the positions of the Chairman of the Board of Directors and the CEO of the company should be adopted by the legislator in state owned companies - in general - regardless of their size, and in large companies - in particular - whose capital exceeds ten million Libyan dinars (according to our definition). This is for several reasons, including addressing the conflict of interest between the Board of Directors and the CEO in forming the executive committees of the Audit and Review Committee and the Evaluation Committee. Furthermore, the system of separating the two positions will contribute effectively to encouraging investors to invest in the company that adopts the separation system. Additionally, the separation of position system addresses the issue of conflict of interest between owners and the CEO, as the separation of the two positions creates an effective chairman of the board of directors who monitors the work of the CEO. Moreover, this system will contribute to creating an environment that supports corporate governance standards, thus helping to establish governance principles, including the principle of transparency, as by adopting the duality CEO system, the individual who is a chairman and CEO at the same time will seek to hide some information and reports that may be presented to the board of directors and will help uncover violations, but by adopting the separation system, the board of directors will not allow the CEO to hide such information.