Are Disruptive CEO Successions Viewed as a Governance Lapse? Evidence From Board Turnover

摘要

A wealth of governance research has examined CEO successions and the negative organizational consequences that arise when boards are unable to effect smooth leadership transitions. Despite those findings, empirical and anecdotal evidence indicates that disruptive successions are still very common. In this article, we investigate whether disruptive CEO successions are viewed as a governance lapse by the board. We focus specifically on succession processes that involve the use of an interim leader. We leverage established research that shows that the pattern of board turnover observed in the wake of negative events is indicative of whether board behaviors are-in practice-viewed as normative violations. We theorize that audiences will disapprove of boards' use of interim CEOs and, therefore, expect that these successions will prompt higher rates of board turnover than those observed following noninterim successions. However, we also anticipate that this relationship will be moderated by situational characteristics (e.g., surprise CEO departure, dynamic industry environment) that complicate succession planning and make audiences more accepting of a board's decision to rely on an interim CEO. Our analysis of 438 successions at publicly traded U.S. firms provides support for these arguments. We discuss the implications of our findings for successions and corporate governance.