TY - JOUR
T1 - Firm performance and CEO turnover
T2 - the moderating role of CEO attributes
AU - Chijoke-Mgbame, Aruoriwo Marian
AU - Boateng, Agyenim
AU - Mgbame, Chijoke Oscar
AU - Yekini, Kemi C.
PY - 2023/11/3
Y1 - 2023/11/3
N2 - Purpose: This study aims to examine the effects of firm performance on chief executive officer (CEO) turnover and the moderating role of CEO attributes on the firm performance–CEO turnover relationship. Design/methodology/approach: Probit regressions were used to examine the relationship between various CEO attributes and CEO turnover and the moderation effect of firm performance on the CEO attributes–CEO turnover relationship. The sample comprises firms from the FTSE 350 Index covering the period 1999–2018. Findings: The results indicate that firm performance negatively and significantly impacts CEO turnover. Further analysis reveals that selected CEO attributes, namely, CEO internal experience, CEO network size and CEO age, moderate the relationship between firm performance and CEO turnover. Specifically, CEO internal experience and performance combine to reduce the likelihood of CEO turnover. However, CEO network size and age when combined with firm performance increase the likelihood of CEO turnover. Practical implications: The results imply that boards should pay more attention to CEO attributes in their decisions to hire and fire executive managers as these factors may affect a wide variety of firm outcomes. Originality/value: This paper makes key contributions to the CEO turnover and corporate governance literature by providing evidence of key factors other than performance that can affect the CEO dismissal decision. Specifically, this study shows that CEO attributes such as CEO internal experience, CEO networks and CEO age far outweigh the importance of performance as a factor influencing CEO turnover decisions.
AB - Purpose: This study aims to examine the effects of firm performance on chief executive officer (CEO) turnover and the moderating role of CEO attributes on the firm performance–CEO turnover relationship. Design/methodology/approach: Probit regressions were used to examine the relationship between various CEO attributes and CEO turnover and the moderation effect of firm performance on the CEO attributes–CEO turnover relationship. The sample comprises firms from the FTSE 350 Index covering the period 1999–2018. Findings: The results indicate that firm performance negatively and significantly impacts CEO turnover. Further analysis reveals that selected CEO attributes, namely, CEO internal experience, CEO network size and CEO age, moderate the relationship between firm performance and CEO turnover. Specifically, CEO internal experience and performance combine to reduce the likelihood of CEO turnover. However, CEO network size and age when combined with firm performance increase the likelihood of CEO turnover. Practical implications: The results imply that boards should pay more attention to CEO attributes in their decisions to hire and fire executive managers as these factors may affect a wide variety of firm outcomes. Originality/value: This paper makes key contributions to the CEO turnover and corporate governance literature by providing evidence of key factors other than performance that can affect the CEO dismissal decision. Specifically, this study shows that CEO attributes such as CEO internal experience, CEO networks and CEO age far outweigh the importance of performance as a factor influencing CEO turnover decisions.
KW - CEO attributes
KW - CEO turnover
KW - Firm performance
KW - Resource dependency theory
KW - Upper echelon theory
UR - http://www.scopus.com/inward/record.url?scp=85161879482&partnerID=8YFLogxK
UR - https://www.emerald.com/insight/content/doi/10.1108/CG-04-2022-0190/full/html
U2 - 10.1108/CG-04-2022-0190
DO - 10.1108/CG-04-2022-0190
M3 - Article
AN - SCOPUS:85161879482
SN - 1472-0701
VL - 23
SP - 1778
EP - 1801
JO - Corporate Governance (Bingley)
JF - Corporate Governance (Bingley)
IS - 7
ER -