Organizational Form, Ownership Structure, and Top Executive Turnover: Evidence from the Property-Casualty Insurance Industry
51 Pages Posted: 18 Sep 2013
Date Written: June 28, 2013
We investigate the role of organizational form and ownership structure in corporate governance by examining CEO turnover in the U.S. property-casualty insurance industry. The probability of non-routine turnover has a significant negative relationship with firm performance, and outside succession dominates when non-routine turnover occurs. Turnover probabilities vary significantly by organizational form and ownership structure. Closely-held stocks have lower non-routine turnover-performance sensitivity than publicly-traded stocks. The probability of non-routine CEO turnover is lower for mutuals than for closely held and publicly-traded non-family-owned stock firms. Family firms with family-member CEOs have the lowest turnover rate of any ownership type, and incoming successors in closely-held family firms mainly come from the controlling families.
Keywords: Organizational form, Ownership structure, CEO turnover, Family-owned firms, Mutuals, Closely-held stocks
JEL Classification: G22, G32, G34
Suggested Citation: Suggested Citation