The Role of Board of Directors in CEO Succession: Theory and Evidence

摘要: In this paper, I develop a search-matching model which predicts that new CEOs who are better matches to the firms will stay longer, perform better, and require less initial compensation. Using comprehensive EXECUCOMP dataset merged with unique data on CEO succession plans, find significant benefits adopt plan: insider successors in such have 1) 30% lower hazard rate of early turnover, 2) 10% higher productivity effort, 3) $1,000,000 also more independent boards (measured by percentage outside directors) larger social networks average directorships each director) pick match qualities. All findings suggest time spend screening candidates size boards’ network play role succession. My results provide support policy implications for legal notice from SEC, dated October 27th 2009, signaled increased concern about planning among corporate first allows shareholders request disclosure companies’ plans.