CEO duality, succession, capabilities and agency theory: commentary and research agenda
Article Abstract:
An alternative interpretation of empirical findings on multiple titles by a single executive is presented. In their 1997 paper, Worrell et al found that the stock market performance of a firm declines when only one person has the three titles of CEO, Chairman and President, a finding the researchers interpreted in terms of agency theory. An additional complementary explanation is that the integration of all three titles is an indicator of the absence of succession planning and consequent lack of attention to the managerial skills needed to effectively steer the firm in the years when the CEO is no longer in position. This reading argues that future research on this topic should not only focus on conventional agency theoretic arguments but also look at the role of other factors, including investor concerns about succession planning and executive capabilities.
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1998
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Industry structure and CEO characteristics: an empirical study of succession events
Article Abstract:
A study on the influence of industry antecedent conditions on different CEO successor characteristics was conducted in response to the shortage of research examining the link between CEO succession and the industry context. Moreover, this study examines the performance effects of aligning CEO successors with their industry environments. Data were gathered on a sample of 134 CEO succession events in nondiversified, manufacturing companies. Findings revealed that industry structure has a critical, although not encompassing, influence on the differences in newly appointed CEOs. However, the study found only limited evidence for the normative perception that firms matching CEO successor characteristics to industry structure perform better after succession than firms with lower-level fit.
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1998
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Specificity of CEO human capital and compensation
Article Abstract:
A study of the relationship between CEO compensation and three types of CEO skills, namely, industry-specific, firm-specific and generic, is conducted by comparing three CEO successor types. These include CEOs coming from within the organization, understood to have firm-specific human capital, CEOs from within the industry, endowed with industry-specific human capital but no firm-specific human capital, and CEOs from outside the industry, who lack both types of skills but have non-specific generic skills. The results of the study support the proposition that differential skill specificity is a factor that is associated with compensation premiums given by companies to external successors. The findings also holds well against other obvious counter hypotheses.
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1997
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