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Better sooner than later: what triggers early CEO dismissal?
Analyzing data from 612 CEO dismissals between 1996 and 2008, the study reveals that nearly half of CEOs are fired before their firms' performance declines relative to peers, challenging the stereotype of passive boards. Key findings indicate that early dismissals are driven by two primary factors: (1) board members' financial incentives (e.g., stock ownership), which motivate proactive action against perceived low-ability CEOs, and (2) ethical violations, with boards showing low tolerance for misconduct regardless of performance. Surprisingly, shareholder pressure and strategic disagreements were not significant triggers for early firings. Firms with vigilant boards experienced quicker post-dismissal recovery, while delays led to prolonged performance declines and higher bankruptcy risks. The study highlights the paradox of shareholder reactions: early dismissals caused short-term stock price drops due to unexpected announcements, whereas late firings had no impact as they were anticipated. These insights underscore the importance of board incentives and ethical oversight in corporate governance. Future research directions include exploring how CEO traits (e.g., narcissism) and board dynamics influence dismissal timing, offering a deeper understanding of proactive leadership transitions.
Ketersediaan
| Call Number | Location | Available |
|---|---|---|
| AMP2502 | PSB lt.dasar - Pascasarjana | 1 |
| Penerbit | Briarcliff Manor, NY: Academy of Management 2011 |
|---|---|
| Edisi | Vol. 25, No. 2, May 2011 |
| Subjek | Corporate governance Firm performance Unethical behavior shareholder value CEO dismissal proactive management board incentives |
| ISBN/ISSN | 15589080 |
| Klasifikasi | NONE |
| Deskripsi Fisik | 2 p. |
| Info Detail Spesifik | Academy of Management Perspectives |
| Other Version/Related | Tidak tersedia versi lain |
| Lampiran Berkas |