CEO Succession Roulette

• 成果类型: Article
• 署名作者: Cvijanovic, Dragana; Gantchev, Nickolay; Li, Rachel
• 署名单位: University of Warwick; Centre for Economic Policy Research - UK; European Corporate Governance Institute; University of Alabama System; University of Alabama Tuscaloosa
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4572
• 发表日期: 2023
• 页码: 5794-5815
• 关键词: CEO TURNOVER; succession planning; Executive labor market; CEO-firm match; CEO turnover-performance sensitivity

摘要

Despite intense scrutiny from investors, markets, and regulators, many public companies have no formal succession plans. Anecdotal evidence links succession risk to significant value destruction, but there is limited academic research evaluating the effects of succession planning on chief executive officer (CEO) turnover outcomes. We provide evidence that succession planning reduces the cost of management transitions by improving their efficiency. Firms with succession plans experience not only lower uncertainty around turnover events but also a faster reduction in uncertainty over the incoming CEO's tenure, consistent with faster learning about CEO-firm fit. Succession planning also raises the quality of the CEO-firm match, as evidenced by longer CEO tenure, and improves the board's readiness to replace an underperforming CEO, increasing turnover performance sensitivity.