CEO AND BOARD LEADERSHIP - THE INFLUENCE OF ORGANIZATIONAL PERFORMANCE, BOARD COMPOSITION, AND RETIREMENT ON CEO SUCCESSOR ORIGIN

This study examined the impact of organizational performance, the composition of the board of directors, and the age of the CEO on the appointment of an internal or external successor in 240 firms to CEOs who left between 1978 and 1984. Poor performance, as measured by abnormal security returns, and a smaller proportion of internal members on the board of directors were associated with an external successor when the departing CEO was younger than traditional retirement age. No significant relationships were found for departing CEOs who had reached retirement age. The results are discussed in the context of leadership exercised by chief executive officers and boards of directors.