The CEO succession process is broken. Many companies have no meaningful succession plans, and few of the ones that do are happy with them. CEO tenure is shrinking; in fact, two out of five CEOs fail in their first 18 months. It isn't just that more CEOs are being replaced; it's that they're being replaced badly. The problems extend to every aspect of CEO succession: internal development program...

This paper studies the turnover of board of directors members in a sample of 72 companies listed on the Milan Stock Exchange during the period 1988-1996. In particular we are able to shed light on the relationships between turnover and inside/outside ownership, and turnover and control change. We find that there is a statistically significant and negative relationship between firm performance a...

We use the resource-based theory and leadership categorization to develop hypotheses about ethnic minority CEO turnover. Using survival analysis, we test find that, as a group, CEOs at US firms experience only half of risk turnover any time do nonethnic CEOs. However, is not spread evenly across subgroups. Asian Hispanic lower than Black share this reduced that consistent with CEOs, but it usef...

This paper analyzes the optimal design of stock option vesting conditions when the CEO faces a risk of being replaced at an interim date. First, I show that long vesting terms do not necessarily discourage but in fact can encourage short-termism. Second, the model demonstrates that the optimal vesting schedule involves balancing incentives for managerial effort with incentives for long-term inv...

This paper examines the impact of Corporate Governance and CEO turnover on the writeoff decision, as well as the motivation for companies to take write-offs. Companies with poor monitoring mechanisms take write-offs due to endogenous factors Conversely, companies with strong monitoring mechanisms take write-offs because of exogenous factors, like negative industry shocks. These ”good write-offs...

Shareholder delegation of the power to fire the CEO to the board of directors is central to corporate governance. While the board ideally acts as desired by shareholders, board entrenchment may insulate a poorly performing manager from shareholders agitating for her removal. The conventional ‘costly firing’ model of managerial entrenchment views this protection from shareholders as purely negat...

In public-policy discussions about corporate disclosure, more is typically judged better than less. In particular, better disclosure is seen as a way to reduce the agency problems that plague firms. We show that this view is incomplete. In particular, our theoretical analysis shows that increased disclosure is a two-edged sword: More information permits principals to make better decisions; but ...