Board Leadership Structure and CEO Turnover
30 Pages Posted: 31 Mar 2002 Last revised: 25 Jul 2014
Date Written: July 2001
We study whether bestowing CEO and chairman duties on one individual affects a board's decision to dismiss an ineffective CEO. The results show that the sensitivity of CEO turnover to firm performance is significantly lower when the CEO and chairman responsibilities are vested in the same individual. These results are consistent with the view that the lack of independent leadership in firms that combine the CEO and chairman positions makes it difficult for the board to remove poorly performing managers.
Keywords: Corporate governance; Leadership structure; CEO duties; CEO turnover; sensitivity to firm performance
JEL Classification: G34, G3
Suggested Citation: Suggested Citation