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.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0701105-111908 |
| Date | 01 July 2005 |
| Creators | Wu, Hui-hwa |
| Contributors | Kuang S. Yeh, Feng Lee Lin, Pei-how Huang |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0701105-111908 |
| Rights | unrestricted, Copyright information available at source archive |
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