CEO Succession and Proprietary Directors: Evidence from Spanish Listed Firms

Abstract

La versión española de este artículo se puede encontrar en: http://ssrn.com/abstract=2324055

This study advances research on CEO succession and board monitoring of senior executives by examining how proprietary directors can affect the probability of CEO dismissal. Drawing on our newly developed database covering all CEO successions occurring in all Spanish listed firms during the period 2007-2010, we propose that proprietary directors may increase the board’s monitoring efforts over the chief executive, forcing him to resign in situations of poor performance. Hypotheses are tested longitudinally, using CEO succession data taken from 111 publicly-traded firms in the Spanish ‘mercado continuo’ over a four-year period.

Keywords: proprietary director, board of directors, ROA, corporate governance