Outside Directors and Ceo Turnover
نویسندگان
چکیده
‘this paper examines the relation between the monitoring of CEOs by inside aud outside directors and CEO resignations. CEO resignations are predicted using stock returns and earnings changes as measures of prior performance. There is a stronger association between prior performance and the prhability of a resignation for companies with outsider-dominated boards than for companies with insider-dominated boards. This result dces not appear to be a function of ownership effects, size effects, or industry effects. Unexpected stock returns on days when resignations are announced are consistent with the view that directors increase firm value by removing bad management.
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