Aggressive Boards and CEO Turnover

81 Pages Posted: 3 Feb 2021

See all articles by Cyrus Aghamolla

Cyrus Aghamolla

University of Minnesota - Twin Cities

Tadashi Hashimoto

Yeshiva University

Date Written: January 4, 2021


This study investigates a communication game between a CEO and a board of directors where the CEO's career concerns can potentially impede value-increasing informative communication. By adopting a policy of aggressive boards (excessive replacement), shareholders can facilitate communication between the CEO and the board. The results are in contrast to the multitude of models which generally find that management-friendly boards improve communication, and help to explain empirical results concerning CEO turnover. The results also provide the following novel predictions concerning variation in CEO turnover: (i) there is greater CEO turnover in firms or industries where CEO performance is relatively more difficult to assess; (ii) the board is more aggressive in their replacement of the CEO in industries or firms where the board's advisory role is more salient; and (iii) there is comparatively less CEO turnover in firms or industries where the variance of CEO talent is high.

Keywords: Corporate Governance, Advising, CEO Replacement, Communication, CEO Turnover, Board Independence

JEL Classification: C72, D82, D83, G34, M41, M51

Suggested Citation

Aghamolla, Cyrus and Hashimoto, Tadashi, Aggressive Boards and CEO Turnover (January 4, 2021). Available at SSRN: or

Cyrus Aghamolla (Contact Author)

University of Minnesota - Twin Cities ( email )

420 Delaware St. SE
Minneapolis, MN 55455
United States

Tadashi Hashimoto

Yeshiva University ( email )

500 West 185th Street
New York, NY NEW YORK 10033
United States

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