The Consequences of Forced CEO Succession for Outside Directors
- 1 October 2000
- journal article
- Published by University of Chicago Press in The Journal of Business
- Vol. 73 (4) , 597-627
- https://doi.org/10.1086/209656
Abstract
We find an increased likelihood of outside director turnover following forced CEO succession, especially among those directors that are closely aligned with the outgoing CEO, own little equity, and make poor replacement decisions. Directors that remain on the board, however, are more likely to acquire new directorships than those that remain on the board of a matched‐sample firm. Overall, the results suggest that outside directors who are not aligned with the CEO and own relatively large equity stakes are rewarded when they remove a poorly performing CEO and replace him or her with a CEO that improves firm performance.Keywords
This publication has 32 references indexed in Scilit:
- Outside directors and CEO turnoverPublished by Elsevier ,2002
- Internal Monitoring Mechanisms and CEO Turnover: A Long‐Term PerspectiveThe Journal of Finance, 2001
- Factors affecting the number of outside directorships held by CEOsPublished by Elsevier ,1999
- The Role of outside Directors in Bank AcquisitionsFinancial Management, 1997
- STRATEGIC CONSEQUENCES OF EXECUTIVE SUCCESSION WITHIN DIVERSIFIED FIRMSJournal of Management Studies, 1992
- SICs as Delineators of Economic MarketsThe Journal of Business, 1989
- Stock prices and top management changesJournal of Financial Economics, 1988
- The Takeover Market, Corporate Board Composition, and Ownership Structure: The Case of BankingThe Journal of Law and Economics, 1987
- Separation of Ownership and ControlThe Journal of Law and Economics, 1983
- Successor Type and Organizational Change in the Corporate EnterpriseAdministrative Science Quarterly, 1972