This paper aims to examine the relationship between board independence and internal control quality (ICQ) in Egypt and investigate whether CEO duality moderates such an association.
A survey among external auditors is used to assess ICQ among Egyptian listed firms over the period of 2007-2010.
Findings show that board independence does not have a significant positive effect on ICQ. However, when testing for the moderating effect of CEO duality on such a relationship, the authors document that the association becomes positive and significant under combined board leadership structure, whereas it is negative under separated leadership structure.
The authors’ results demonstrate that CEO duality plays a governance role in weak legal environment like Egypt by strengthening board independence role in increasing ICQ.
