A Selection That Cannot Stand the Test: Succession Contexts and New Ceo Dismissal
نویسندگان
چکیده
This study examined “new CEO dismissal”, i.e., a new CEO is dismissed within three years after succession. Based upon agency theory and human capital theory, we argue that new CEO dismissal may represent a correction to an inappropriate CEO selection and accordingly, succession contexts that tend to lead to an inappropriate CEO selection will increase the likelihood of new CEO dismissal. With a sample of 204 CEO successions in the time period of 1993-1998, we find that the origin of the new CEO and the characteristics of the board of directors at the succession time have significant impact on the likelihood of new CEO dismissal.
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