Download This PaperCEO Turnover and Director Reputation
86 Pages Posted: 4 Dec 2023
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CEO Turnover and Director Reputation
Date Written: December 2, 2023
Abstract
This paper analyzes the reputational effects of forced CEO turnovers on outside directors. We find that directors interlocked to a forced CEO turnover experience large and persistent increases in withheld votes at subsequent re-elections relative to non-turnover-interlocked directors. Directors are not penalized for an involvement in a turnover per se but for forced CEO turnovers that are related to governance failures by the board. Our results challenge the widespread view that forcing out a CEO can generally be understood as a sign of a well-functioning corporate governance.
Keywords: CEO turnover, Director elections, Director reputation, CEO succession, Shareholder voting
JEL Classification: G32, G34
Suggested Citation: Suggested Citation
Jonas Romer
University of St. Gallen - Swiss Institute of Banking and Finance ( email )
Rosenbergstrasse 52
St. Gallen, CH-9000
Switzerland
Markus Schmid (Contact Author)
University of St. Gallen - Swiss Institute of Banking and Finance ( email )
Unterer Graben 21
St. Gallen, 9000
Switzerland
University of St. Gallen - School of Finance ( email )
Unterer Graben 21
St.Gallen, CH-9000
Switzerland
Swiss Finance Institute
c/o University of St. Gallen
Dufourstrassse 50
St. Gallen, SG 9000
Switzerland
European Corporate Governance Institute (ECGI) ( email )
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium