Work

CEO turnover and director reputation

Year: 2024

Type: article

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.

Source: Journal of Financial Economics

DOI: 10.1016/j.jfineco.2024.103971

Authors: Felix von Meyerinck, Jonas Romer, Markus Schmid

Institutions: University of Zurich, University of St.Gallen, European Corporate Governance Institute, Swiss Finance Institute

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $4,250