And The Winner Is! Corporate Life Cycle Stage as an Antecedent to CEO Selection Characteristics

This study investigates the relationship between corporate life cycle stage as a measure of the key strategic decisions facing a newly hired CEO, and the selected CEO’s demographic and biographic characteristics. Using corporate financial data from the COMPUSTAT database to measure corporate life cycle stage, and CEO profiles published in Forbes list of top paid CEOs, we tested our hypotheses regarding the relationship between corporate life cycle stage and newly hired CEOs’ age, experience, and education. As predicted, we found a significant, negative relationship between newly hired CEOs’ level of education and corporations in the mature life cycle stage. Surprisingly, and contrary to our prediction, we also found a significant, negative relationship between newly hired CEOs’ level of education and corporations in the growth life cycle stage. Furthermore, growth stage firms selected CEOs with lower levels of education than mature stage firms. In the analysis, the life cycle stage variable explains approximately 11% of the variance in the education level of selected CEOs. The results suggest that corporate life cycle stage and its associated strategic challenges can be used to predict CEO education characteristics across single and multi-business corporations of varying sizes across industries. These new findings should encourage CEOs, investment analysts, corporate directors, and research scholars to fully consider the relationship between CEO education characteristics and the life cycle stage of a firm facing a CEO succession event.