Journal of Economics and Behavioral Studies (ISSN: 2220-6140) Vol. 12, No. 3, pp. 53-64, June 2020 53 CEO Duality and Financial Performance: Testing the Moderating Role of Firm Age: Evidence from a Developing Economy Akisimire Richard*, Ernest Abaho, Maureen Tweyongyere Makerere University Business School, Uganda *rakisimire@mubs.ac.ug Abstract: This paper tests the moderating role of firm age on the relationship between Chief Executive Officer (CEO) duality and financial performance among manufacturing firms in Uganda. A cross section survey was adopted using 78 manufacturing firms in Uganda. Data was analyzed using descriptive statistics, correlation and hierarchical regression. Modgraph software was also used to ascertain the validity of the set hypothesis. Results reveal that whether the CEO doubles as chairman of board or not, this does not significantly affect firm Financial Performance. However, as the firms grow older, the role of CEO-Board Chairman duality phenomenon gains significance in determining financial performance. Therefore, as firms grow in age, the CEOs should not be the same as Board chairpersons if firms have to perform well financially. Since only a single research methodological approach was employed in this study, future research can undertake to use a mixed methods approach to provide more detailed insights. Further, a longitudinal approach can also be employed to study financial performance trends among manufacturing firms over years. Entrepreneurs of these firms should put emphasis on proper segregation of the CEO role and those of the board chairman especially as firms grow in age. A moderating role of firm age on the relationship between CEO duality and financial performance was tested among manufacturing firms; previous studies have tended to test the direct or mediating effects. Keywords: CEO duality, Firm age, financial performance, Manufacturing firms, Uganda. 1. Introduction In this study, we mainly investigate the moderating role of firm age on the relationship between CEO duality and financial performance among manufacturing firms in a developing economy perspective. Most Manufacturing firms in sub-Saharan Africa provide a fulcrum around which their host economies turn (Kamukama, Kyomuhangi, Akisimire, & Orobia , 2017; Mutambi, 2011; Tumwine et al., 2015). In Uganda for instance, the industrial manufacturing sector is one of the economic pillars of the economy with a GDP contribution of 20%, generating over 80% of manufactured output (UNIDO, 2013; UBOS, 2017). Comparing the level of economic performance with the government efforts in developing industrialization, this sector should be performing better. Thus, for the economy to prosper there is need to put emphasis on this sector because; in addition to its GDP contribution, the sector creates employment for both the skilled and unskilled labor as well as providing value addition to the agricultural output for both local consumption and export purposes (Nalukenge et al., 2018; Tumwine et al., 2015). Despite their great importance, most manufacturing firms have had challenges of poor financial performance and this sometimes leads to firm failure (Mutambi, 2011; Nkundabanyanga, 2016; Akisimire et al., 2016). In fact, most of these firms have registered a low return on investment, low return on assets and some of them fail to maintain their liquidity levels (Akisimire et al., 2016; Ishengoma & Kappel, 2008). Numerous reasons have been observed to cause this poor financial performance. Studies indicate the most of the firms have challenges of owner managers that serve both as CEOs and board chairpersons simultaneously. Subsequently, this impairs the independence of board members while executing their board duties (Hofmann & Lampe, 2013; Mutambi, 2011). Conspicuously, the board is customarily tasked with an oversight role of evaluating the management team and CEO (Firth et al., 2014; Cornforth, 2004; Freeman, 2008). Because of this, board chairpersons are expected to understand their leadership roles in relation to how it contributes to the performance of the firm (Desoky, & Mousa, 2013; Kakabadse & Kakabadse, 2013). Likewise, the CEO is tasked with overseeing the daily operations of the business as well as operationalising strategic plans (Bathula, 2008). This means that, allowing the CEO to double as the board chairman may cause CEOs to perform no duty other than evaluating themselves and the board ends up as a mere rubber stump (Tonello, 2011). Besides, founder CEOs are observed to have a tendency of treating the organization as their “baby” and want to control it as much as possible courtesy of their unified leadership.