CEO succession decisions are an important part of boards of directors’ responsibilities to shareholders. I study two aspects of these decisions. First, I examine whether or not forced CEO departure decisions are based on information that the board of directors has, but external investors do not. I find that the proxy for private information in the forced CEO departure decision is positively related to abnormal returns at the forced CEO departure announcement. This is consistent with the hypotheses that prior to the departure announcement, investors underestimate the probability of forced CEO departure, and that private information revealed in forced CEO departure announcements has positive implications for firm value. A second question related to boards of directors’ CEO succession decisions concerns their decisions to participate in the external market for CEO talent. I find evidence suggesting that board decisions to participate in the external market for CEO talent are influenced by the costs and benefits of doing so. Specifically, cross sectional analyses of a proxy for industry homogeneity shows that this variable is positively related to external labor market participation, more standardized search processes, and a higher likelihood that a newly appointed CEO will survive three years or more. These findings are generally consistent with prediction that when industries are more homogenous, external search costs are lower, and higher quality matches may be obtained. I also test hypotheses related to benefits of matching to individuals with industry specific skills versus general management skills. I find that for several alternative proxies for industry specific skill demand, there is a negative relation between demand for industry specific skills and the decision to hire externally outside the industry. This can be interpreted as support for hypotheses that cross sectional variation in benefits associated with industry specific skills leads to fewer CEO appointments outside the industry, while benefits of general management skills are associated with a higher likelihood of inter-industry CEO appointment.

Thesis (M.M. (Business Executive Coaching))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2015. / The study explored the CEO transition process that takes place in the handing over of the organisation from the outgoing CEO to the incoming CEO and how executive coaching can facilitate the transition process. The past two decades have seen a reduction in the tenure of CEOs. In addition the transition period has contracted. This means that the incoming CEO is often faced with many challenges that may have been alleviated in a longer or more structured transition process. As CEO succession has a major impact on the organisation, and is disruptive in itself, executive coaching might present an opportunity to manage the transition and improve the settling in and effectiveness of the incoming CEO and thereby the performance of the organisation. . Friedman and Olk (1995), Garman and Glawe (2004) and Vancil (1987) defined a structured CEO succession and transition process in organisations. The transition process is conceptualised as a settling-in period where the designated CEO and outgoing CEO work together in a dual capacity whereby the organisation would slowly be transferred from one to the other over a period of months or even years (Kakabadse & Kakabadse, 2001). The Chairman plays an influential role in selecting the incoming CEO (Dalton & Dalton, 2007b; Engelbrecht, 2009; Fredrickson, Hambrick, & Baumrin, 1988) and in supporting the incoming CEO in his/her initial appointment period (Kets de Vries, 1987). There are various factors that determine the selection of an insider CEO or outsider CEO based on the performance and future strategy of the organisation (Dalton & Kesner, 1985; Friedman & Olk, 1995; Khurana, 2001; Ocasio, 1999; Zajac, 1990). The selection of the incoming CEO is important as it impacts the market value of the organisation and creates disruption within the organisation (Grusky, 1963). The incoming CEO, whether an insider or outsider CEO appointment, experiences many challenges when taking up the position. These challenges include delivering continuous growth, improved performance and profitability of the organisation (Bower, 2007; Giambatista, Rowe, & Riaz, 2005), managing key relationships with the Chairman, Board of Directors, Shareholders, key customers and suppliers as well as the management of people within the organisation. Other challenges are of a more personal nature, such as self-doubt and balancing work-life (McCormick, 2001; Stajkovic & Luthans, 1998; Stock, Bauer, & Bieling, 2014). Many of these challenges can be attributed to the reduced transition period that an incoming CEO has (Charan, 2005). iv There are various support structures available to the incoming CEO to supporting the incoming CEO in his/her initial appointment period. These include the Chairman, mentors and executive coaching. Various coaching models were considered in supporting the incoming CEO through the transition period and the challenges experienced (Bond & Naughton, 2011; Passmore, 2007; Saporito, 1996). The aim of exploring executive coaching models was to recommend a coaching framework that could be used in the CEO transition process. The research methodology used in the study was qualitative. Semi-structured interviews were undertaken in order to gain insights from the lived experience of CEOs, Chairmen and Board of Directors of organisations (Ponterotto, 2005; Wimpenny & Gass, 2000). Further to this an analysis of the CEO turnover in the Top 40 companies listed on the Johannesburg Stock Exchange (JSE) was undertaken, which served to triangulate the results from the respondent interviews. It was found that there was both planned and unplanned CEO succession in organisations and this impacted the transition process and period that took place between the outgoing CEO and the incoming CEO. Planned CEO succession usually arose from the planned CEO retirements and allowed for a long transition period. An unplanned CEO succession arose from the untimely resignation, retirement or death of the existing CEO. This left the newly appointed CEO taking the position with a very short transition period, if at all. Following from the planned and unplanned CEO succession there was found to be a mismatch between the theory of the CEO succession and transition processes and the practice thereof. This seemed to be more evident from a South African perspective as most of the literature on the subject of CEO succession and transition processes was internationally based with very scant South African literature available on the topic. Executive coaching can provide the structure for the incoming CEO to orientate him/herself to the organisational dynamics, setting the vision and strategy for the organisation as well as the effective execution of that strategy. Further, executive coaching can assist the incoming CEO in the personal challenges of leadership, managing people and stakeholders as well as self-doubt and work-life balance that the newly appointed CEO may experience.

Most corporations today have an organizational framework that includes a separation between ownership and management of the company. Along with the Board of Directors, the chief executive officer (CEO) usually has the power to make significant decisions on corporate policy and also takes personal responsibility for the performance of the company. Thus the selection of an optimal CEO is a crucial business decision, and is the focus of this management study. When undertaking the procedures for CEO succession, the members of the Board must select appropriate candidates for the position, as well as deciding upon the CEO¡¦s job responsibilities. The Board evaluates the extent to which the various candidates¡¦ capabilities and experiences match the needs of the corporation. After discussing the pros and cons of each candidate, the Board selects the most appropriate individual for the position. However, certain circumstances often exist that serve to affect this decision process. Specifically, the quality and timing of Board meetings may have a serious detrimental affect on selecting the optimal candidate. By analyzing the literature reviews and annual reports of 682 public companies in Taiwan in 2003, three succession logics of selecting a CEO can be observed: 1) social relationship, 2) political power, and 3) rational capability. From these three logics, the following conclusions can be drawn: 1) The social relationship has the most influence on the selection outcome, with political power acting as the second most influential aspect, and management capability as the third; 2) The influence of the Chairman¡¦s abstract power, as well as his ownership of stock, do not have an obvious influence on the selection outcome, though the Chairman¡¦s control over Board seats has a statistically significant impact on CEO selection; 3) A CEO¡¦s social relationship can not be replaced by his management capability; 4) CEO¡¦s social relationship and stock ownership both have high positive correlation with his involvement of the Board, while the Chairman¡¦s power and the CEO¡¦s management capability don¡¦t.

This study investigates the personal experience of newly appointed chief executives in transitioning into the CEO role. Adopting an exploratory qualitative design, data was obtained from two semi-structured interviews with 19 newly appointed chief executives, for a total of 38 interviews. The main contribution of this thesis to the extant literature is to show the ways in which CEOs go through an identity construction process when transitioning into the role, which is characterized in two ways. First, there exists a bi-directionality of influence between the personal identity of the CEO and the organizational identity. Second, this process comprises strong identity demands (lack of specificity of the role and weak situation) and identity tensions (personal identity intrusion and identity transparency) that dispose new CEOs towards an unbalance that promotes individuality. This disequilibrium might hinder the integration of new chief executives into the organization, since the data suggests that new CEOs are responsible for fostering their own integration by connecting aspects of their personal identity with the identity and culture of the organization. The thesis offers a theoretical model of the CEO identity construction process and concludes with a series of propositions that address the ramifications of these findings to our understanding of CEO succession.

In the last decades the Swedish labor market has been characterized by a stereotype perception on women’s role and position on the market. The perception speaks of the characteristics of female leadership as being less qualified causing the gaps between the two genders to transform into a gender segregated society. The historically slow progress has limited the career opportunities for women to reach top management. However the increasing discussions during the 21st century on how to reduce the gender differences in the labor market has made it more acceptable with women on higher positions. Despite of that there is still a lack of women representing top management position on the Swedish labor market today. According to the efficient market hypothesis, financial assets have the ability to adapt and reflect on all available information in consideration of the price. According to the theory this means that the announcement of CEO succession doesn’t have an effect on the share price. In contradiction previous studies show that there is a correlation between published information and share prices. The aim of this paper is to examine how CEO successions effect share prices and wheatear there are differences in how the price is affected by the succession of male or female CEO´s.  The result of the study shows that there is a correlation between male and female CEO successions as confirmed by testing a hypothesis that also has rejected the efficient market hypothesis. What is significant in the study is the difference in reaction to the announcement of CEO succession between the two genders. Female CEO succession generates clear negative abnormal returns unlike male CEO succession generating positive abnormal returns. The study also indicates that female succession generates a clearly unstable share price during the estimated timeframe which can be clearly discerned from a relatively stable share price that can be observed from male successions. In conclusion, the study shows that there are differences between both genders furthermore indicating that the traditional and narrow minded view of women’s leadership is still anchored in the society.

This dissertation is a series of study on CEO turnover, succession, and compensation, which consists of three essays. In essay 1, I investigate how the Sarbanes-Oxley Act (SOX) affects CEO tenure and the characteristics of CEO turnover. I do not find a significant relation between financial reporting and CEO turnover even though SOX enforces accurate financial reporting and personal responsibilities. However, I find SOX affects CEO turnover via the changes to corporate boards. I provide some evidence supporting the idea that intensified monitoring significantly reduces CEO tenure. Specifically, I find SOX significantly affects the relation between CEO tenure and the independence of the board. I find that the likelihood of forced CEO turnover is higher in the post-SOX period. I also document that intensified monitoring increases the likelihood of forced turnover, specifically, I find CEO power concentration, institutional ownership, negative news, and shareholder governance proposals significantly affect the odds of forced turnover. I also provide some evidence supporting the hypothesis that firm performance is inversely related to forced CEO turnover. I document that the average number of audit committee meetings significantly increased in the post-SOX period, and the interaction between the number of audit committee meetings and firm performance significantly increase the likelihood of forced CEO turnover. Overall, the results support the notion that SOX affects boards' decisions on CEO turnover. I do not find that the proportion of outside directors significantly affects the odds ratio of forced turnover, indicating outside dominated boards may not be effective in removing CEOs. Managerial discretion defines the working environment of a manager and could potentially affect a board's choice of a successor CEO. In essay 2, I hypothesize that boards tend to appoint younger (older) CEOs in firms with high (low) managerial discretion. I further propose that the relation between managerial discretion and successor CEO age may be moderated by the age of board members, the origin of the successor, and the successor's designated heir status. Using a sample of 629 successions occurring between 1994 and 2005, I find empirical evidence that supports my first hypothesis for the total sample and the sample of successions with voluntary turnover. Board age, successor origin, and the successor's designated heir status do not moderate the results for the total sample. However, I find that board member age and designated heir status moderate the relation between managerial discretion and CEO age following forced turnover. Following voluntary turnover, successor origin and designated heir status moderate the result. The above mentioned three board and CEO characteristics may either strengthen or weaken the link between managerial discretion and CEO age depending on how the incumbent CEO leaves the CEO position. In addition, several other factors also statistically affect boards' decisions regarding CEO age, including governance, CEO board tenure, and titles held by the successor. In essay 3, I examine the role of managerial discretion in setting CEO pay at succession. Using a sample of 656 successions from 1994-2005, I provide evidence that a successor CEO's pay level is positively and significantly associated with the level of managerial discretion. However, outside succession moderates the link between managerial discretion and pay level. I further find that the moderating effect of a successor's origin is contingent upon the bargaining power of the board of directors for the total and forced turnover samples. As for the pay structure of a successor, the results of the total sample and forced turnover subsample provide evidence that managerial discretion positively relates to the proportion of risk-based pay and outside succession has a moderating effect on this relation; and the moderating effect depends on the board bargaining power. As for the voluntary turnover sample, the pay structure of the new CEO is mainly determined by the pay structure of the predecessor, firm performance, and the board bargaining power. This study enriches existing research on managerial discretion and succession by linking CEO bargaining power at succession with the theory of managerial discretion.

This study investigates the personal experience of newly appointed chief executives in transitioning into the CEO role. Adopting an exploratory qualitative design, data was obtained from two semi-structured interviews with 19 newly appointed chief executives, for a total of 38 interviews. The main contribution of this thesis to the extant literature is to show the ways in which CEOs go through an identity construction process when transitioning into the role, which is characterized in two ways. First, there exists a bi-directionality of influence between the personal identity of the CEO and the organizational identity. Second, this process comprises strong identity demands (lack of specificity of the role and weak situation) and identity tensions (personal identity intrusion and identity transparency) that dispose new CEOs towards an unbalance that promotes individuality. This disequilibrium might hinder the integration of new chief executives into the organization, since the data suggests that new CEOs are responsible for fostering their own integration by connecting aspects of their personal identity with the identity and culture of the organization. The thesis offers a theoretical model of the CEO identity construction process and concludes with a series of propositions that address the ramifications of these findings to our understanding of CEO succession.

This thesis explores gender-related barriers in CEO successions. Only 4% of Fortune 500 CEOs are female despite the fact that women have held the majority of college degrees in the US since the late 1990's and now comprise almost half of the workforce and the majority of managerial positions. Their representation is low even in comparison to the other two top management positions from which CEOs are typically sourced. It is less than one-third of the percentage of both female executive officers (15%) and board directors (17%). A holistic and qualitative research approach was utilized. Data were gathered on societal, individual and organizational factors through one-on-one, semi-structured interviews with board directors, executive search consultants and female CEOs, and analyzed using computer-assisted coding software. This thesis challenges the perception that women's individual barriers are the main reason why there are so few female CEOs. While all three types of barriers were found, organizational barriers appear to be the most important. The convergence of predominately male board directors, CEOs and top executive search consultants with informal, subjective, secretive and disparate talent management and CEO successions programs effectively results in the CEO position being a better fit for men than women. While moderating factors were beneficial to the women who have become CEOs, many factors were found for why they cannot be relied upon to greatly increase the number of female CEOs. A deliberate and comprehensive effort by society, individuals and organizations is required.