Article

Planning for Future Leadership: Procedural Rationality, Formalized Succession Processes, and CEO influence in Chief Executive Officer Succession Planning

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Abstract

Despite substantive organizational ramifications, surprisingly little theory explains executive succession planning processes. A firm's board of directors has the fiduciary responsibility to select CEOs, but, historically, boards have failed to exercise this authority. Increasing focus on corporate governance has prompted directors to become more engaged in organizational management, but boards face significant barriers to gathering and processing information. However, there is a dearth of research examining how boards overcome informational barriers to enhance decision-making effectiveness. Accordingly, the current study integrates procedural rationality in decision-making with research on boards as information-processing groups to explore how and why boards conduct succession planning processes. Procedural rationality results in formalized processes designed to collect essential information about CEO succession candidates; these processes, in turn, lead to a greater quantity and quality of CEO succession candidates. We also illustrate how CEOs can influence the effectiveness of board information gathering and processing. The tests of the theoretically generated hypotheses rely on in-depth qualitative interviews, coupled with unique survey and archival data from 355 firm-year observations of 218 large organizations, collected over three years.

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... In the life cycle of an organization, the succession of the leader is unavoidable and carries significant firm consequences. Most CEO succession studies investigate direct causes or effects of succession, without the underlying mechanism being thoroughly described, in part because current theory cannot explain, and researchers seldom observe, succession planning processes in practice (Schepker et al., 2018). Boards face a difficult challenge in handling transition processes to a CEO. ...
... Boards face a difficult challenge in handling transition processes to a CEO. They lack in-depth knowledge of the company and its employees and will rely on the CEO for details and access to succession applicants (Schepker et al., 2018). ...
... According to Schepker et al. (2018), most researchers have explored CEO succession studies to identify causes or consequences of succession without fully explaining the underlying mechanism. From my literature review, the current theory does not describe succession planning processes in practice and researchers rarely observe them. ...
Research
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Some FOB leaders lack effective strategies to transition a family-owned business successfully
... CEO succession is inevitable in a firm's life cycle (Finkelstein et al., 2009). Research traditionally conceptualizes CEO succession as primarily influenced by the outgoing CEO (Zajac & Westphal, 1996) or fraught with tension between the CEO and the board of directors (Schepker et al., 2018). Some boards face a difficult task in managing CEO succession processes because they lack in-depth knowledge of the firm and its executives (Schepker et al., 2018). ...
... Research traditionally conceptualizes CEO succession as primarily influenced by the outgoing CEO (Zajac & Westphal, 1996) or fraught with tension between the CEO and the board of directors (Schepker et al., 2018). Some boards face a difficult task in managing CEO succession processes because they lack in-depth knowledge of the firm and its executives (Schepker et al., 2018). Strategic planning and forecasting are connected to succession planning and provide ties to interactions with the board of directors and organizational performance (Gillespie & Zweig, 2010;Hinsz et al., 1997;Withers et al., 2012). ...
... Organizational boards of directors and CEOs often have conflicting views and goals when it comes to the function of succession planning (Schepker et al., 2018). The stark contrast is that boards try to increase the number of candidates evaluated while outgoing CEOs try to decrease the number of candidates evaluated (Khurana, 2004). ...
Thesis
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This study sought to explore the knowledge-based, motivational, and organizational root causes preventing Xrante from implementing an executive succession plan. Moreover, this study further examined the underdevelopment of workplace competencies for employees as potential executive candidates, as aligned to the ten succession competencies, and their lack of involvement in the design of the executive succession plan. Clark and Estes’ (2008) gap analysis provided the conceptual and methodological framework for this study. Through the use of an explanatory sequential mixed methods design, relationships between knowledge, self-efficacy, value, attribution, and emotion were investigated. Results from surveys, interviews, and document analysis identified six verified needs on the problem of practice in the areas of conceptual, procedural, and metacognitive knowledge, value, and cultural models and settings. The verified needs were utilized in the selection of evidence-based recommendations for solutions and the creation of an integrated implementation and evaluation plan using the New World Kirkpatrick Model (Kirkpatrick & Kirkpatrick, 2016). The suggested executive candidate training program in Chapter 5 informs a potential change initiative towards competency-based employee development that would feed into the organizational executive succession planning for many following years.
... Scholars concur that the experiences and skills of board members can considerably impact their monitoring ability and the quality of advice that they offer (Johnson, Schnatterly & Hill 2013; Similarly, practitioners and researchers encourage companies to formalise their succession planning procedures, especially for their top leaders (Schepker et al. 2018;Spencer Stuart 2018). Board succession planning should ensure that critical roles are properly fulfilled and that directors continuously sharpen their skills and knowledge (Wang, Jaw & Tsai 2012). ...
... Talent practitioners anticipate a greater reliance on internal sourcing methods in the future (Chartered Institute of Personnel and Development 2017). Schepker et al. (2018) explained that the likelihood of disruption during executive leadership transitions will decrease if internal succession endeavours are formalised. If the selected internal successor has a thorough understanding of the operational aspects, uncertainty and disruption will be limited when the leadership transition occurs. ...
... This tendency relates to the urgency of replacing an executive who fulfils a crucial operational role. Schepker et al. (2018) highlighted a research gap to investigate the nature and outcomes of directorate succession planning procedures. The strategies reported in this article relate to internal succession planning and sourcing of board candidates. ...
Article
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Orientation: The monitoring and advisory roles of directors are highlighted by escalating corporate uncertainty and diminishing confidence in leaders in the latest phase of the industrial revolution. Nomination committees should thus give due consideration to current and required human capital needs of boards when conducting succession planning, as their decisions have substantial implications for stakeholders. Research purpose: To investigate board succession planning practices and policies at selected companies listed on the Johannesburg Stock Exchange. Motivation for the study: There is an evident need for proactive succession planning that accounts for prudent board renewal and director development to ensure business continuity. Research design, approach and method: Given the well-developed corporate governance framework in South Africa, the views of eight selected directors were gauged on succession planning by conducting semi-structured interviews. Thematic analysis was conducted to derive themes from the qualitative data. Main findings: Nomination committees increasingly account for board composition concerns raised by prominent shareholders. The interviewees suggested that board succession planning is often not formalised. They mentioned that succession policies should be flexible to account for rapid change. Furthermore, the board development mechanisms applicable to executive and non-executive directors differ substantially. Proactive development of the talent pipeline is thus essential. Practical/managerial implications: As heterogeneous boards offer several benefits to companies and their stakeholders, nomination committees should account for diversity considerations when conducting succession planning. Policies pertaining to tenure, diversity and independence should be formalised and annually evaluated and reported on. Contribution/value-add: Several recommendations are offered to enhance board succession planning, based on the lived experiences of directors in an emerging market.
... In essence, the upper echelons perspective is a theory of information processing (Cho and Hambrick 2006;Van Doorn et al. 2017). TMTs are seen as informationprocessing groups who overcome information barriers to ensure decision-making effectiveness (Schepker et al. 2018). By understanding TMTs as information-processing instruments, research on upper echelons can examine the role contingencies play in facilitating or hindering information processing. ...
... The information-processing perspective allows us to better understand how role tenure shapes CHROs' decision-making rationale. First, it is particularly important to examine the experience gathered in CHRO roles because this reflects CHROs' information-processing capacity (Schepker et al. 2018). CHROs with more role-specific experience-possibly gathered in different firms-can process HRrelated information from distinctive angles and against new environments and have a broader cognitive frame, resulting in creative solutions (Crossland et al. 2014). ...
... Hence, the CHRO would benefit from a CEO with pronounced information-processing capacities. We focus on CEOs and CHROs as information-processing actors because this allows us to understand their decision-making rationale (Schepker et al. 2018). The information-processing view draws on the concept of bounded rationality. ...
Article
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Academics and practitioners emphasize the rising importance of Chief Human Resource Officers (CHROs). CHROs act as heads of staff—they motivate the personnel and offer guidance. This study helps clarify the impact of increasingly relevant CHROs and reveals how their company and role tenure influence firms’ social performance. Drawing on a multisource longitudinal dataset of S&P 500 firms, we empirically validate our hypotheses. The sample contains 283 companies with 1944 firm-year observations from 2005 to 2017 and combines manually collected top management team data with data from Thomson Reuters Datastream. Our results show that there is a negative relation between CHROs with long company tenure and firms’ social performance, whereas CHROs with long role tenure positively relate to firms’ social performance. We also investigate the moderating role of CEO prior experience (i.e., HR experience, education, company and role experience) on the effect of CHRO company and role tenure on firms’ social performance. Surprisingly, CEO prior experience negatively moderates the relationship between CHRO role tenure and firms’ social performance. Overall, this article offers novel implications for the CHRO role and uncovers a distinction between two types of CHROs: CHRO firm dinosaurs versus CHRO role gorillas.
... Previous corporate governance research in both for-profit and nonprofit sectors has shown that board members, on behalf of stakeholders, play a key role in monitoring managerial actions, providing advice for executives, and facilitating external resource acquisition efforts (Callen et al., 2010;Hillman & Dalziel, 2003;LeRoux & Langer, 2016). More recent evidence, however, suggests that increased emphasis on corporate governance has given rise to board involvement not only in activities related to "decision control" but also in "decision management" (Judge & Talaulicar, 2017;Schepker et al., 2018), and that board members have become more directly involved in the process of strategic decision-making (SDM) in organizations (Barroso-Castro et al., 2017;Jaskyte, 2018;Zahra & Pearce II, 1990). ...
... Recently, scholars have associated these inconclusive findings with the causal distance between independent and dependent variables (e.g., Brown, 2005; Gazley & Nicholson-Crotty, 2018; Schepker et al., 2018). They have shown, for example, that while evaluation of the relationship between board characteristics and firm performance have generated useful insights, it is difficult to accurately study such relationships in the absence of a deep understanding of mediating processes (e.g., decision-making processes) and proximal outcomes closer to the decision (e.g., decision quality) (Schepker et al., 2018). ...
... The empirical evidence regarding this relationship in the context of boardrooms, however, is surprisingly sparse. In fact, the only study we could find that entailed evaluation of the relationship between board decision processes and proximal outcomes is by Schepker et al. (2018) who evaluated the impact of board's formalized CEO succession decision processes on quality and quantity of succession candidates. They found that following formalized decision processes by boards facilitates collection of more information and generation of richer pool of succession candidates, increasing the effectiveness of succession planning practices. ...
Article
Free Access Link: https://onlinelibrary.wiley.com/share/author/6WFMK5XK9IESU6MKSAZZ?target=10.1002/nml.21491 Findings of recent scholarly investigations show that board members of nonprofit organizations (NPOs) have become more directly involved in the process of strategic decision-making (SDM). Despite these findings, our understanding of decision processes in NPOs is under-developed and little is known about the factors that impact decision processes and their outcomes in NPOs. In this study, we shed light on the process of SDM within the boardrooms of NPOs by focusing on decision comprehensiveness as an important aspect of the SDM process. Our findings, based on data from a sample of 244 nonprofits, indicate that NPO's mission clarity and decision process fairness within the boardroom increase the comprehensiveness of decision-making processes and ultimately improve decision quality.
... Therefore, the rules of the game and processes for succession must be communicated early and clearly. Stated plainly and well in advance, the process and rules of the game will eliminate much of the uncertainty and delay (Calabro et al., 2018;Michel & Kammerlander, 2015;Schepker, Ulrich, & Wright, 2018). In order to preserve family and organizational cohesiveness during the transfer of leadership and/or ownership, planning processes and mechanisms that provide a valid structure need to be developed. ...
... Leadership succession, on the other hand, covers the identification and development of the new CEO to meet all future leadership needs. It is a transfer of responsibility for the ongoing management of the family firm (Blumentritt et al., 2013;Calabro et al., 2018;Schepker et al., 2018). Section 4 discusses leadership succession while section 5 addresses ownership succession. ...
... Findings illustrate a lack of succession planning in many family firms, even when these firms expect a succession in the near future. This lack of planning can be detrimental for the future of the family firm (Schepker et al., 2018). In order to stimulate succession planning, researchers can further examine the factors that hinder or encourage the succession planning process. ...
Article
Succession is one of the key challenges family firms have to deal with. As many family firms fail to survive their succession process, it is important to identify the succession challenges these firms face. This article therefore digs deeper into existing leadership and ownership succession issues in a sample of private Flemish family firms. In particular, it explores the timing and planning of both types of succession. Additionally, it discusses the reasons to postpone and the factors to stimulate leadership and ownership succession planning. Results are based on survey data of over 400 Flemish family firms. Results illustrate a lack of succession planning in many Flemish family firms, even when these firms expect a succession in the near future.
... Compensation practices -because of their visibility and the strong norms ascribed to the sector -are often the first characteristic to come under scrutiny as NPOs pursue market-based revenue. The nonprofit sector in the US has seen 25% growth of new organizations in the past decade, making it the third largest workforce behind retail and manufacturing (Salamon, 2018). The sector accounted for approximately 12.3 million jobs in 2016, or roughly 10.2% of total U.S. private sector employment (Bureau of Labor Statistics, 2018). ...
... Accordingly, the gatekeepers of these resources represent the most influential external stakeholders to whom the organization is ultimately accountable (Mitchell et al., 1997). Resources derived from these stakeholders extend beyond their financial contributions to NPOs, as relationships with these stakeholders confer legitimacy, and government agencies grant NPOs the ability to receive tax deductible contributions (Salamon, 2001a(Salamon, , 2001b(Salamon, , 2018. From the perspective of NPOs, key funders such as corporate donors, private donors, and/or government agencies can easily shift their support to similar nonprofits (Gras and Mendoza-Abarca, 2014;Gronbjerg, 1991). ...
... Organizational age (Age) is calculated as the difference between the year an NPO was founded from the last year it appears in our sample. As compensation tends to increase with organizational size (Wasserman, 2006), we follow previous research using assets as a proxy for size (Schepker et al., 2018) and include its log transformed value (Assets(log)). To account for revenue from revenue sources other than market-based means (Gras and Mendoza-Abarca, 2014), we account for the proportion of government funding (%Government) and private donations (%Donations). ...
Article
We examine how shifting resource dependencies influence compensation strategy during commercial transitions within entrepreneurial nonprofits. Analyzing a longitudinal sample of 4732 organizations, we show how compensation strategies shift non-linearly as nonprofits transition from contributed resource dependence to market-based resource dependence. Dynamic quadratic models unveil a dual threshold of commercialization concerning this transition. Nonprofits at moderate stages of commercialization contend with competing dependencies from both contributed and market-based sources, resulting in a decrease in compensation spending and an increase in part-time employment. At higher stages, contributed resource dependence is eclipsed by market-based dependence, reflected in increasing compensation spending and full-time employment.
... Previous corporate governance research in both for-profit and nonprofit sectors has shown that board members, on behalf of stakeholders, play a key role in monitoring managerial actions, providing advice for executives, and facilitating external resource acquisition efforts (Callen et al., 2010;Hillman & Dalziel, 2003;LeRoux & Langer, 2016). More recent evidence, however, suggests that increased emphasis on corporate governance has given rise to board involvement not only in activities related to "decision control" but also in "decision management" (Judge & Talaulicar, 2017;Schepker et al., 2018), and that board members have become more directly involved in the process of strategic decision-making (SDM) in organizations (Barroso-Castro et al., 2017;Jaskyte, 2018;Zahra & Pearce II, 1990). ...
... Recently, scholars have associated these inconclusive findings with the causal distance between independent and dependent variables (e.g., Brown, 2005; Gazley & Nicholson-Crotty, 2018; Schepker et al., 2018). They have shown, for example, that while evaluation of the relationship between board characteristics and firm performance have generated useful insights, it is difficult to accurately study such relationships in the absence of a deep understanding of mediating processes (e.g., decision-making processes) and proximal outcomes closer to the decision (e.g., decision quality) (Schepker et al., 2018). ...
... The empirical evidence regarding this relationship in the context of boardrooms, however, is surprisingly sparse. In fact, the only study we could find that entailed evaluation of the relationship between board decision processes and proximal outcomes is by Schepker et al. (2018) who evaluated the impact of board's formalized CEO succession decision processes on quality and quantity of succession candidates. They found that following formalized decision processes by boards facilitates collection of more information and generation of richer pool of succession candidates, increasing the effectiveness of succession planning practices. ...
Article
Findings of recent scholarly investigations show that board members have become more directly involved in the process of strategic decision making. In addition, because of the unique characteristics of boards in non-profit organizations (NPOs), decision processes in these entities can significantly differ from those of for-profit firms. Despite such differences, our understanding of decision processes in NPOs is under-developed and little is known about the factors that impact decision processes and their outcomes in non-profit boards. In this study, we shed light on the process of decision making within the boardrooms of NPOs by focusing on decision comprehensiveness as an important aspect of strategic decision making processes (SDMPs). Our findings based on a sample of 244 non-profit CEOs indicate that NPO’s mission clarity and perceptions of procedural justice within the boardroom significantly influence the comprehensiveness of decision making processes and ultimately impact decision quality.
... We specifically asked 63 Chief Human Resource Officers (CHROs) of Fortune 500 companies if women directors face unique boardroom challenges and what those might be. CHROs spend considerable time in the boardroom, interacting with directors on topics such as executive compensation and succession planning, and are positioned to see challenges women directors face (Schepker et al., 2018). We also interviewed seven directors (three women and four men) who have collectively served on 22 distinct boards of Russell 1000 and/or comparably sized private companies, and who have all been C-suite executives, with three having served as CEOs. ...
... Thus, we used data from MSCI's GMI Ratings to create covariates for (a) men's past directorship experience (average) in the prior 5 years, (b) women's past directorship experience (average) in the prior 5 years, (c) men's tenure (average), as well as (d) women's tenure (average) on the focal board. We used dummy-coding to account for CEO duality, (i.e., CEO is the board's chairperson), gender of CEO (firms with a woman CEO were coded as '1'), and industry effects, where we grouped firms into six categories based on standard industrial classifications (SIC), following Schepker et al. (2018). Extant literature indicates women directors may influence the attendance behaviors of directors generally, in terms of absentee rates (Adams & Ferreira, 2009). ...
Article
Full-text available
Meta-analytic results show that board gender diversity is modestly associated with firm performance, but there is notable heterogeneity among findings. Board gender diversity allows access to women’s perspectives, potentially helping boards, but diversity can also trigger biases that exclude women directors, such that boards do not integrate meaningful perspectives. Addressing this problem, we leverage the categorization-elaboration model, contact theory, and critical mass theory to build new theory as to how men directors can serve as allies to women directors to better leverage diverse perspectives. We empirically test how considerations that reduce out-group categorization and bias against women moderate the board gender diversity-firm performance relationship. Our results show that gender diverse boards perform better with more formal contact among men and women director colleagues, and that gender diverse boards with more men directors who only have prior experience working with token-women, perform worse. Our work helps explain how and why board gender diversity can improve or detract from firm performance. This extends the literature by illustrating the important consequences that occur when firms do (or do not) have men directors who are likely to be allies of gender diversity.
... To test our hypotheses, we conducted two independent studies. Prior studies have highlighted that multiple method studies have many advantages over single method studies [64][65][66][67][68][69][70]. Each method has certain inherent biases and limitations, and using two methods complements eachother and reduces these biases and limitations [64,65]. ...
... Many scholars have also advocated the use of multiple methods over single method as they produce robust findings by triangulating the evidence and are much more persuasive than findings from single method [72]. Therefore, the degree of confidence and robustness in the findings are stronger for studies using more than one method [66][67][68][69]. In our study, we use field data in study 1 that enhances external validity and experimental data in study 2 that strengthens internal validity [65]. ...
Article
In recent years, crowdfunding has gained a lot of popularity as it helps to leverage the power of the crowd in the development and commercialization of new products. Thus, scholars are encouraged to explore factors that could enhance the success of these crowdfunding projects. This article investigates the impact of social interaction (i.e., proactively updating the potential funders and seeking their feedback) on the success of the crowdfunding project among technology ventures. Moreover, we examine the moderating role of the product characteristics, i.e., product development stage and product innovativeness, on the relationship between social interaction and crowdfunding success. To test our hypotheses, we conducted two studies. For the first study, we collected and analyzed data from 203 Kickstarter projects from the mobile apps technology category. For the second study, we designed two short experiments with four hypothetical mobile apps technology projects each and collected data from 132 crowdfunders about their likelihood of supporting the projects. Both studies clearly highlight that social interaction has a significant positive impact on project success in terms of receiving funding and feedback among technological ventures. This article also suggest that products in the ideation stage benefit more from social interaction than products in the commercialization stage. Moreover, in contrast to our assumption, our findings indicate that the positive relationship between social interaction and project success is stronger for products with incremental innovativeness than radical innovativeness. Our study adds to the existing literature in crowdfunding by highlighting ways by which entrepreneurs can improve the success of their crowdfunding projects.
... Atualmente, o conceito evoluiu para muito mais do que apenas uma estratégia de contenção de saídas, assumindo-se como uma ferramenta integrada de gestão que potencia o desenvolvimento de capacidades de liderança, de formação de equipas eficazes e de atração e retenção de talentos, permitindo às equipas e organizações operarem com todo o seu potencial (Schepker, Nyberg, Ulrich, & Wright, 2018;Zepeda, Bengtson & Parylo, 2012) Deste modo, definir e estabelecer o planeamento de sucessão revela-se cada vez mais importante no contexto de trabalho atual. Em primeiro lugar, porque os indivíduos são cada vez mais estratégicos e proativos no desenvolvimento das suas carreiras (Fink, 2010). ...
... Assim, as organizações devem assumir uma postura proativa na identificação e desenvolvimento de talentos que possam ser solicitados para sucessões planeadas e não planeadas. Em terceiro lugar, porque o planeamento de sucessão é uma ferramenta crítica para a manutenção e desenvolvimento do conhecimento e do talento num contexto socioeconómico dinâmico, marcado pela globalidade, concorrência internacional e pela contínua necessidade da máxima eficiência (Griffiths, 2012;Schepker et al., 2018). ...
Preprint
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Neste capítulo será abordada a temática do planeamento de sucessão em equipas. O capítulo encontra-se organizado em seis secções: a primeira secção trata o surgimento, enquadramento e definição do conceito de planeamento de sucessão; na segunda secção é debatida a importância e vantagens da implementação de um plano de sucessão; na terceira secção são apresentados os três principais tipos de planeamento de sucessão; a quarta secção dá a conhecer o processo genérico de sucessão; na quinta secção é apresentado e discutido um caso prático à luz do processo genérico de sucessão. Por fim, na sexta secção, é apresentada uma checklist de boas práticas para uma eficaz implementação deste processo.
... With this view in mind, TDC's are developed and constructed specifically for the purpose of Talent Review Communities in organizations. These communities are succession planning projects conducted with the view of identifying and mapping talent for key positions, supporting business continuity in deploying, rotating and promoting talent into core positions and strategic roles, allocating investment into the right candidates and the right developmental interventions (both at individual level and group wide) and countering talent attrition by methodically managing the business's talent pools and pipelines (Morrison, 2015;Schepker, Nyberg, Ulrich, & Wright, 2018). The robust data generated through a TDC enables several outcomes: ...
... Relating the second use of technology within TDC is the integration of data and talent analytics flowing from the process. Consistent with the narrative of Schepker et al. (2018), methodical and data driven approaches are increasingly becoming apparent in Succession Planning and Talent Management, to position for Strategic Human Resource and Leadership Development. This is perhaps best summarised by Rasmussen and Ulrich (2015;p. ...
Chapter
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The purpose of this chapter is to explore the value of an integrated Talent Development Centre (TDC) approach as a dynamic, hybrid, positive psychological leadership development and talent analytics framework within organizations. Specifically, the chapter aims to explore the modern idea of the TDC, its theoretical underpinnings and its practical and procedural application to meet the development demands of inter-connected-, dynamic- and digital organisations. The chapter is structured through three core components: Firstly, an overview is provided on the evolution of the TDC as a hybrid assessment and development centre. The purpose-, function-, and differentiation between assessment—and development centres are presented. Secondly, an argument is made for the adoption of a developmental and learning orientation towards TDC’s—supporting a positive organisational intervention approach while expanding on the theoretical premise of competency-based learning and assessment design. Thirdly, key principles for the successful implementation of a contemporary TDC is put forward; responsive to the demands of a dynamic and expansive work context driven by a number of emerging trends. Recommendations are provided pertaining to the role of TDC’s in integrated succession planning, leader readiness, talent calibration and intervention mapping on both individual—and group level.
... When they choose an insider to be the successor, the quality of the relationship between the potential successor and other parties may also be important during the succession process in a nonfamily firm (cf. Schepker, Ulrich, & Wright, 2018). For instance, it is the responsibility of the board of directors to select CEOs (Mace, 1971). ...
... However, recent studies show that the board may face informational barriers affecting their ability to gather and process information -for instance, related to the succession process (cf. Schepker et al., 2018). In this regard, high-quality relationships between, for instance, the potential successor and the other managers or between the potential successor and members of the board may empower the board's effect on the succession planning process by reducing the existing information asymmetry. ...
Article
Socioemotional wealth (SEW) is an important point of reference for decision-making in family firms. This study shows that the SEW dimension of renewing family bonds through dynastic succession is positively related to the level of succession planning in a family firm. However, the link between the intention for transgenerational succession and the existence of such planned processes does not appear to be as straightforward as predicted. Therefore, by drawing on relational systems theory, we argue that high-quality relationships will positively moderate the expected positive effect of the intention for transgenerational succession on the level of succession planning in a family firm. Our results partly confirm this argument.
... With this view in mind, TDC's are developed and constructed specifically for the purpose of Talent Review Communities in organizations. These communities are succession planning projects conducted with the view of identifying and mapping talent for key positions, supporting business continuity in deploying, rotating and promoting talent into core positions and strategic roles, allocating investment into the right candidates and the right developmental interventions (both at individual level and group wide) and countering talent attrition by methodically managing the business's talent pools and pipelines (Morrison, 2015;Schepker, Nyberg, Ulrich, & Wright, 2018). The robust data generated through a TDC enables several outcomes: ...
... Relating the second use of technology within TDC is the integration of data and talent analytics flowing from the process. Consistent with the narrative of Schepker et al. (2018), methodical and data driven approaches are increasingly becoming apparent in Succession Planning and Talent Management, to position for Strategic Human Resource and Leadership Development. This is perhaps best summarised by Rasmussen and Ulrich (2015;p. ...
... Pengaruh pengambilan keputusan dengan pendekatan client center pada sekolah Nurul Islam juga berkaitan dengan jenjang karir siswa. Pengambilan keputusan bidang karir Schepker et al. (2018) merupakan langkah memilih dan memilah dari beberapa pilihan rencana kedepan. Menumbuhkan kemampuan pengambilan keputusan dikatakan oleh HNL yang menyatakan bahwa: "saya waktu konseling disuruh memikirkan sendiri solusinya tapi ibu kaya memberi arahan biar saya bisa ambil keputusan. ...
Article
Someone client center counseling-centered because the counselor and client are in a psychological contact relationship. The purpose of the study was to describe the implementation of client center counseling with online media. The research is qualitative with the following stages: determining questions, collecting informant data, getting data, and reporting. The informants comprised one teacher of counseling and guidance and five students of private MTs Nurul Islam. The results of the research based on Nvivo coding that the client center counseling has a core theme that supports the reception in counseling, client center and direction. The results of coding Nvivo online counseling develop a supporting theme, namely counseling constraints. Based on this, implementing client center counseling with online media can run even though the major obstacle is internet signal and the media used is WhatsApp with the videocall feature. The application of online counseling at MTs Swasta Nurul Islam fosters independence, emotional management, and making the right decisions for the students’ future.
... First, we used Harman's one-factor test of common method bias as in previous research [88,89]. All items of the four variables in our study (GHRM, OBSE, employee green advocacy, POS) were analyzed by non-rotating exploratory factor analysis. ...
Article
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Green advocacy has been the focus of both practitioners and theorists for decades. However, little attention has been paid to employee green advocacy despite its significance to employee green behaviors and the environmental sustainability of organizations. In an effort to contribute to this nascent field, this study investigates what promotes employee green advocacy and its psychological mechanisms. Based on cognitive consistency theory, we propose that green human resource management (GHRM) can influence employees’ organization-based self-esteem, which motivates them to engage in employee green advocacy to sustain their positive self-image and avoid possible cognitive disorders. Perceived organizational support moderates the relationship between GHRM and employee organization-based self-esteem. Data from a sample of 135 employees and their chief human resource officer (CHO) supported our hypotheses. We discussed the theoretical and practical implications of our findings.
... The board intensively K interacts with the family members in the family firm and plays a crucial part in fostering a sense of familiarity (Huang and Hilary 2018) and collectivity among employees (Barroso-Castro et al. 2016), both of which might help shape organizational psychological capital. Besides the TMT, the board constitutes a family firm's most important information-processing group (Schepker et al. 2018), transforms newly acquired information disseminated throughout the organization into performance outcomes (Barroso-Castro et al. 2016), and determines as well as monitors the implementation of the strategic agenda (Corbetta and Salvato 2004). ...
Article
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Organizational psychological capital—comprising hope, confidence, resilience, and optimism—is a vital resource for family firms in times of stress. Surprisingly, whether and how family firm idiosyncrasies impact organizational psychological capital remains unclear. Considering the theoretical paradigm of socio-emotional wealth, we investigate two important family firm characteristics as antecedents of organizational psychological capital: the family involvement in the top management team and the generation of the family firm. We further propose that these relationships are moderated by a board of directors’ tenure. Based on an empirical analysis of listed U.S. family firms, our results confirm a negative relationship between family membership in the top management team and organizational psychological capital. In addition, we find that descendant family firms exhibit higher levels of organizational psychological capital than founder family firms. The results also confirm the moderating role of board tenure. This study works toward a more holistic view of family firm heterogeneity and specifically how different types of family involvement shape a firm’s positive strategic resources.
... The argument for developing internal high-potential leadership programs is underscored by research indicating the many benefits of developing and promoting internal talent for senior leadership roles (Deortentiis, Ployhart, Van Iddekinge, & Heetderks, 2018;Berns & Klarner, 2017;Harrell, 2016;Schepker, Nyberg, Ulrich, & Wright, 2018). As a bridge field that has only recently entered the lexicon of academia across various professional organizations (Association for Talent Development, Human Resource Planning Society, Society for Industrial-Organizational Psychology, Academy of Management, etc.), talent management and specifically the field of high-potential leadership is drawing increasing attention from scholars, consulting firms, and corporations. ...
... Our approach is conservative because negative sentiment involving internal stakeholders is less likely to be made public and thus is only partially reflected in the press, despite its possible diffusion to external stakeholders. 6 We considered media coverage in the three months preceding the announcement because it typically takes about three months on average for the board to finalize the CEO succession decision (Schepker et al., 2018), and during this period information about the prospective CEO tends to leak to the press and elicit reaction (e.g., Friedman & Olk, 1995;Gomulya & Boeker, 2014). We did not observe relevant press coverage of CEO successions outside our time window. ...
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How does the appointment of an outside CEO affect the hiring firm’s performance? Prior research reports that outside CEOs tend to underperform compared to inside CEOs, with high performance variance. Extending CEO-centric perspectives, we predict that experiential learning enhances postsuccession performance, while negative transfer learning undermines it. We then offer a novel, stakeholder-centric theoretical perspective, conjecturing that stakeholders’ negative sentiment toward the CEO appointment undermines post-succession performance. We further conjecture that outside CEOs are less effective in leveraging their executive experience and suffer more from negative transfer and negative sentiment compared to inside CEOs, who can leverage their familiarity and social embeddedness in the firm, which explains why outside CEOs may underperform. Analyzing the appointments of CEOs in US public firms, we find that counter to expectations, the length and breadth of their executive experience do not explain post-succession performance nor the performance differences between outside CEOs and inside CEOs. Rather, the misfit between the CEOs’ corporate background and their firms’ characteristics and the negative sentiment surrounding their appointments explain performance differences and the underperformance of outside CEOs. Accordingly, our study directs attention to the important yet previously understudied reactions of stakeholders to CEO appointments.
... A propensão para a continuidade nos cargos executivos foi encontrada como uma barreira para o planejamento, enquanto elementos de qualidade de governança e desenvolvimento interno da entidade são fatores encontrados para substituir o planejamento de sucessão executiva (Mckee & Froelich, 2016). Assim, como regra geral, cabe aos conselhos de administração de uma firma, quando sociedades anônimas, a responsabilidade de selecionar o CEO, mas, o histórico mostra que, aparentemente, os conselhos não têm conseguido exercer essa autoridade (Schepker et al., 2018). ...
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Este estudo qualitativo interpretativo exploratório identifica 16 fatores facilitadores e oito fatores restritivos da política de sucessão da alta gestão nas cooperativas de crédito. Trata-se de um segmento que apresentou um rápido crescimento no sistema financeiro nacional entre 2002 e 2015. Há poucas pesquisas que discutem os impactos da fase de pré-sucessão do presidente em organizações sem fins lucrativos. As evidências indicam que a sucessão de administradores em cooperativas de crédito é um evento central e complexo, mas não crítico. Mostram também que cooperativas de crédito têm as suas idiossincrasias no tocante ao processo sucessório da alta gestão. Ou seja, embora os fatores contributivos sejam similares ao contexto das organizações com fins lucrativos, a maioria dos fatores restritivos é característica própria do cooperativismo.
... Further, turning to Industry 4.0, the current studies of Gen Y and Z employees do not typically include the organizational circumstances of Industry 4.0, which present the most important challenge for organizations worldwide [8]. Here, leadership is especially important from a strategic viewpoint [8,28], but it is evident that organizations do not plan for it as much as they should [29]. Younger generations, as future professionals as well as leaders, are currently not considered as an important challenge in the context of Industry 4.0. ...
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This study combines two main challenges for organizations today, as it examines the alignment between personal values of future leaders and the values needed in the Industry 4.0 workplace. Based on the movement of the organizational environment toward a more multidisciplinary, open, collaborative and multicultural environment, we presuppose that the Industry 4.0 workplace requires a more benevolent, universally oriented and generally self-transcended leaders. Drawing upon Schwartz's value theory, we examine the impact of Generations Y and Z's personal values on their leadership inclination. The results from the survey of 371 young participants from Generations Y and Z reveal that self-enhancement (i.e., power and achievement), openness to change and conservation values most significantly affect leadership inclination. Meanwhile, benevolence, universalism and general self-transcendence values-cornerstones of the Industry 4.0 workplace-show negative effects on leadership inclination in the frame of the Industry 4.0 workplace. This indicates a poor fit between the values of future leaders and the values of the Industry 4.0 workplace. These findings have significant implications for human resource management in future organizations and contribute to the understanding of future leaders. In addition, the findings can help organizations to manage sustainable workings in an Industry 4.0 environment.
... Researchers have conducted a wealth of research to study the impact of executive succession on firm performance (Berns and Klarner, 2017;Bilgili et al., 2017;Farah et al., 2019;Schepker et al., 2018). They studied the impact of well-planned succession on firm growth and performance (Ballaro and Polk, 2017). ...
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Purpose The purpose of this paper is to provide a model that can explain how organizations may retain their executives’ tacit knowledge in the organization especially during the succession period. The proposed model takes into consideration three critical contexts that may assist in improving the knowledge flow during the transition period, namely, motivation context, transition context and ability context. Design/methodology/approach This paper presents a conceptual framework that emphasizes the importance of the will and skill of two parties involved in succession, i.e. the predecessor and successor, as well as the context of the succession. To this end, the paper advances a set of propositions that explain how these different contexts affect the quantity and quality of the knowledge acquired by the successor at the end of the succession period. Findings This paper advances a theoretical model that describes the antecedents and moderator of job-specific knowledge acquired during executive succession. Research limitations/implications This paper presents a theoretical model that explains knowledge flow during the transitory period of succession. It emphasizes the importance of the motivation and ability of the partners involved while taking into consideration the context of succession. Practical implications This paper contributes considerably and in a practical manner to managers in general and to human resource managers in particular. It draws the attention of concerned managers to check the motivation of both successor and predecessor in experiencing the transition, explain to the successors the job description of the position to direct their attention to learn specific knowledge and equip both parties involved in the succession with the needed skills. Originality/value This paper advances a new concept termed as accelerated engaged tacit knowledge acquisition. This concept complements other perspectives of knowledge flow and learning and takes into consideration the specific context of executive succession.
... Studies that investigate replacement decisions find that the board is more likely to appoint an outsider if the CEO turnover follows a period of poor firm performance (Parrino, 1997). Some scholars take the organizational-adaptation view (Friedman and Singh, 1989) to underline the benefits of external succession; yet others adopt the organizational disruption view (Schepker et al., 2018;Vancil, 1987) to propose the selection of an external CEO as a disruptive and disadvantageous event for organizations (Georgakakis and Ruigrok, 2017). However, such research has not investigated how the origin of the new CEO could influence consumers' perception of the products manufactured by the firm. ...
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Purpose This paper aims to investigate the influence of implicit self-theories and the change in CEO of a firm after product failure on consumers’ preference of the enhanced product. Design/methodology/approach Three experiments were conducted involving product failure and CEO change scenarios. Findings Studies demonstrate that incremental theorists prefer the enhanced product after the CEO change (vs no change), whereas entity theorists do not prefer the enhanced product after the CEO change. This effect is mediated by consumers’ perception of the likelihood of success of the firm after the CEO change. Furthermore, entity theorists prefer the enhanced product only when the CEO change is external (vs internal). Research limitations/implications Future research could investigate if the impact of CEO change on product perception depends on the severity of the situation, and identify boundary conditions under which the CEO change is not beneficial. Practical implications The results suggest that organizations can take advantage of the leadership change by introducing new products strategically around the period of leadership change. Marketers can induce incremental mindset in their advertisement material during the period of leadership change to ensure that all consumers have a positive perception of the enhanced products. Originality/value This is the first research to investigate how consumers respond to leadership changes made by organizations. The findings show that different signals (internal vs external CEO change) can generate different reactions across different receivers (incremental vs entity theorists).
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While mandates for strategic change may accompany the selection of new Chief Executive Officer (CEOs), the broader set of leadership changes necessary for strategic change remains unclear. Motivated by upper echelons and resource dependence theories, direct relationships between three structural events associated with CEO succession and strategic change are examined, as well as whether these relationships are mediated by replacing top management team (TMT) members. Significant mediated relationships are found in which TMT replacement mediates the relationships of pre-succession firm performance and hiring an outsider as CEO with post-succession strategic change. Involuntary CEO turnover is found to be directly related to post-succession strategic change, with no significant mediating effects from TMT replacement. These findings suggest that boards seeking strategic change following a CEO succession should also consider TMT member succession, including whether CEO candidates can leverage their networks to attract new TMT members with human and social capital that supports strategic change objectives.
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This paper explores how executives’ prior employment ties to interlocking directors, or those who hold additional board seats or executive positions at outside firms, influence individual executive interfirm mobility. As organizational boundary spanners, interlocking directors may be able to influence executive outcomes both within and outside of executives’ current firms. But given natural constraints on internal promotion for executives, we suggest most executives will tend to leverage ties to interlocking directors to access external opportunities, as manifested by movement to outside firms. Analysis of interfirm mobility among a sample of Standard & Poor’s 1500 executives between 2000 and 2014 offer support for this idea. We find a positive association between individual executives’ prior employment ties to interlocking directors and their hazard of movement to outside firms, including to the other firms where these directors serve. At the same time, we argue and find that the strength of this latter relationship will further depend on directors’ competing motivations owing to their specific positions in the focal and interlocking firms. Whereas holding a lead position on the focal firm’s board (i.e., as chairperson or lead independent director) weakens this relationship, holding the position of chief executive officer in the interlocking firm strengthens it. Our theory and findings highlight the unique and important role of interlocking directors in executive interfirm mobility and, in doing so, contribute novel insights regarding how ties to boundary spanners can influence individual outcomes for those to whom they are linked.
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We build upon evidence suggesting the precariousness of the situation organizations face when trying to fill CEO openings affects both which executives seek and accept such positions and which executives are sought and endorsed by those tasked with hiring. We argue that while more precarious situations likely deter some executives from pursuing and/or accepting such opportunities, more hubristic executives’ tendencies make them likely to do so despite the associated challenges. Concordantly, those tasked with filling CEO openings likely view more hubristic executives as particularly important for combatting the challenges of more precarious situations, leading them to seek and endorse such executives. Using multiple conceptualizations of precarious situations, we find support for our arguments in a sample of CEO changes in S&P 500 firms. Why do organizations select more hubristic executives to fill CEO openings? We answer this question by highlighting the role that situational precariousness plays. Specifically, not all CEO openings are equally attractive to prospective CEOs and not all prospective CEOs are equally attractive to decision makers tasked with filling such openings. We argue and find support for the notion that more hubristic executives’ tendencies make them more likely to pursue and accept CEO opportunities at organizations in more precarious situations while those tasked with filling CEO openings likewise believe more hubristic executives’ tendencies are particularly important given the precarious situations those organizations face. Our findings advance knowledge of CEO hubris and provide insights for practice.
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Purpose-The direct nexus between board characteristics, earnings management (EM) practices and dividend payout is examined in this study, followed by an examination of the indirect mediation impact of EM practices in the nexus between board characteristics and dividend payout. It aims to provide new empirical evidence from the Jordanian market, which is an emerging market. Design/methodology/approach-The study population consists of all service firms that were listed on the Amman Stock Exchange (ASE) between 2012 and 2019. Due to the lack of availability of their complete data during the period, four service firms were omitted from the population; hence, a sample of 43 service firms was acquired over the time frame (2012-2019), yielding a total of 344 firm-year observations. Moreover, panel data analysis was employed in this study, and data for the study were acquired from yearly reports as well as the ASE's database. Findings-Based on the GMM estimator findings, board size and independence have a negative and significant influence on the EM, but CEO/chairman duality has a positive and significant impact. Simultaneously, the impacts of female representation on the board of directors and the number of board meetings were both positive but insignificant. The findings also found that four board characteristics, including board size, female representation on the board of directors, CEO/chairman duality and the number of board meetings, had a significant negative or positive effect on dividend payout, while board independence did not. Additional findings show that EM practices have a direct negative insignificant effect on dividend payout, whereas EM practices partially mediate the relationship between board characteristics and dividend payout. Research limitations/implications-The current study's limitation is that it only searched in Jordanian service firms listed on ASE from 2012 to 2019 to fulfill the study's objectives; thus, we urge that future work explores the study models for other sectors, whether in Jordan or other growing markets such as the Middle East and North Africa. Practical implications-The findings of this study may be utilized by analysts, investors and other strategic decision-makers to enhance Jordan's financial market's efficiency and efficacy. These findings will improve policymakers' willingness to impose appropriate constraints, perhaps boosting Jordan's financial market performance and efficacy. These findings may also help investors make more enlightened judgments by utilizing board characteristics and EM factors that predict firm dividend policy. Originality/value-Contradictions in the results of earlier investigations inspired the current study, with the findings filling a gap in the existing literature. This study differs from previous studies by constructing a novel research model and analyzing the mediating influence of EM in the nexus between board characteristics and dividend payout.
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Research summary The question of what boards do, or should do, has remained a central focus in governance research. Much of this research is based on explicit theories or empirical models that impose assumed behaviors onto boards – such as monitoring – that are thought to define their roles and duties. While these explicit perspectives have offered critical insights, we suggest it is time to consider directors' implicit beliefs of their roles and duties to understand their perspective of the board's overall role. We use a grounded theory approach to develop theoretical insights about directors’ implicit views of their roles and duties. We integrate information learned from extensive interviews with active directors and executives and find that directors view themselves as strategic partners with their firms’ executives. Managerial summary How do directors view their work on their boards? This remains a critical question for corporate governance researchers and practitioners alike. To help answer this question, we conducted extensive interviews with current directors and executives. Our analysis of these interviews suggests that directors view their CEOs as generally acting in the best interests of their firms. In turn, directors consider strategically collaborating with their CEOs as critical to their board service. Recognizing the unique perspectives that directors bring to the boardroom has important implications for governance practices directed toward ensuring overall board effectiveness. This article is protected by copyright. All rights reserved.
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Purpose The purpose of this paper is to investigate several antecedents of succession planning in family firms: founder status, the family chief executive officer (CEO)’s inability to let go and the family CEO’s gender. Design/methodology/approach This study conducts moderated mediation analysis on a sample of 259 family firms. Findings The results show that family firms led by founders show lower succession planning levels than family firms led by descendant family CEOs. This effect is mediated by the family CEO’s inability to let go. Furthermore, the influence of the emotion of being unable to let go on succession planning is dependent on the family CEO’s gender. This influence is smaller when the family CEO is female than when the family CEO is male. Originality/value The study introduces the family CEO’s inability to let go as a mediator in the founder-succession planning relationship. The results add empirical evidence to the debate about gender influences in family firms. By showing that emotions have a different outcome concerning succession planning depending on the family CEO’s gender, this study enriches gender research. The study also contributes to the family business field by introducing relational theory as a valuable theoretical framework to include gender in succession research.
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We conduct a comprehensive review of the chief executive officer (CEO) succession literature and update a CEO succession typology that incorporated manuscripts published through 2014. Our review illustrates that most of our understanding of succession and related processes stems from research based primarily in macro research traditions. We highlight ways that scholars can develop deeper understandings of CEO succession processes by capitalizing on knowledge and practices that are visible from more micro lenses such as industrial and organizational (IO) psychology, human resources (HR), and organizational behavior (OB). Specifically, we advocate applying lessons about recruitment, training, fit, culture, selection, turnover, human capital resources, and decision making from IO psychology, HR, and OB research to extend our understanding about CEO succession and board decision making. Expected final online publication date for the Annual Review of Organizational Pscyhology and Organizational Behavior, Volume 8 is January 21, 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.
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This paper seeks to propose a conceptual framework for defining the relationship between training and development and retaining employees through job satisfaction as the intermediary variable in Yemen's banking sector. Indeed, employee retention is a critical success factor for organizations worldwide. Training and development is also one of the most vital issues of human resource management. By reviewing the literature, it is clear that theorists, academicians as well managers emphasize that training and development is an essential and decisive factor. Thus, this paper aims to determine the possibility of enhancing feelings of job satisfaction for workers in the banking sector in Yemen through training and development opportunities granted to them by the institution. From this point of view, the organization's ability to retain its employees and the low intention rate of employee turnover can cause great inconvenience to the organization. The research design for the current study is quantitative. For data collection and measurement, the study mainly adopts both descriptive research design while for data analysis; the correlation research design has opted., a set of questionnaires primarily used during the data collection. The results of this paper are likely to emphasize the importance of training and development as a critical factor affecting job satisfaction, which in turn affects employee retention in the banking sector in Yemen. This study contributes to raising awareness of the importance of training and development as a critical factor in job satisfaction, which is very important, especially regarding the organization's ability to retain its employees.
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Research Summary Extant research rarely explores the relationship between executive compensation and CEO succession planning, despite practitioner claims that executive pay disparities indicate succession planning (in)effectiveness. Leveraging signaling theory, we use 830 succession events from 2010–2017 to show that pay disparity between the CEO and the highest paid non‐CEO executive is positively related to the likelihood of outside CEO succession. Thus, boards need to be aware of the implications of possible unintentional signals sent via executive compensation decisions. We do not find evidence of an interactive effect when compensation and CEO succession are co‐managed using linking pin directors – directors with compensation and CEO succession responsibilities – but supplemental analyses suggest a positive main effect of linking pin directors on the likelihood of inside CEO succession. Managerial Summary Powerful watchdog agencies assert that high pay differences between a firm's CEO and its next highest paid executive (CEO‐HPE pay disparity ) indicate succession planning challenges. This assertion has profound implications for stakeholders, but evidence supporting it is unclear. Our study examines the relationship between CEO‐HPE pay disparity and the board's choice of an outside CEO, an indicator of ineffective succession planning. We find evidence that higher pay disparity signals an increased likelihood of choosing an outside CEO successor. We also find that boards who co‐manage compensation and succession may be more likely to hire an inside CEO successor. Our findings suggest that boards need to understand how compensation decisions may be inadvertently signaling future CEO succession choices. This article is protected by copyright. All rights reserved.
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How can new CEOs – as the architects of their top management teams (TMT) – compose the executive group to realize high performance? We attend to this question by drawing on the notion of factional subgroups. We argue that TMT change after a CEO succession event can trigger a factional faultline between executives hired by the new CEO, and executives who had been TMT members prior to succession (the “guardians-of-the-previous-regime”). Such faultlines might activate disruptive TMT processes in the succession's aftermath and, thus, hurt post-succession firm performance. We also argue that the detrimental effects of factional subgroups strengthen under conditions of poor pre-succession firm performance and predecessor dismissal, but mute in situations of orderly (follower) succession. Overall, our research links faultlines theory with CEO succession research to advance our understanding of how TMT reconfiguration in strategic leadership transitions impacts organizations.
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Leadership is not a finite proposition, and so the well-governed health sector Board will include leadership as part of its strategic review process and to keep CEO and Executive team succession as a standing Board agenda item because it ensures a multilayered, multigenerational process. At its extremes, the extent of this ‘future fit’ leadership assessment will be based on ensuring either continuity (of strategy, policy, stewardship, and culture) or transformation (to new care or business models) in response to changing circumstances. The identification of individuals who are able to deliver against these scenarios is referred to as succession planning.
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Rewarding collective outcomes has become an increasingly important strategic motivational tool for driving collective success, reflecting the insight that paying employees for individual contributions does not always optimize performance in collective endeavors. Research into different types of collective pay for performance (PFP), or pay that is contingent on collective outcomes, has been studied in diverse academic fields (e.g., economics, strategy, psychology), but the compartmentalization between these academic disciplines hinders conceptual coordination. To advance this research and its related insights, this article provides a review of the theory and evidence pertaining to the relationships between different collective PFP types and collective outcomes. We also provide a meta-analysis that shows that collective PFP has desirable outcomes (e.g., meta-analysis shows an overall ρ = 0.11; p < .001), substantiating the value of studying collective PFP separately from individual PFP. The review also reveals a lack of empirical and theoretical development and highlights the need for a comprehensive theory of collective PFP. Our cross-disciplinary review of 106 empirical articles builds a foundation for advancing common pursuits, integrating knowledge, and creating theory. The consolidated perspectives point to promising directions for future research.
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In this review, we challenge the idea that directors are well positioned to be effective monitors of management. Moving beyond the logic of incentives and ability, we conceptualize a model based on the premise of boards as groups of individuals obtaining, processing and sharing information and explain how variation in information processing demands at the director, board and firm level may challenge effective monitoring. We draw on multiple theoretical perspectives to identify these barriers to effective board monitoring. Our goal in reviewing these barriers is to help us take stock of existing research in corporate governance and to better explain board behavior beyond traditional agency and resource dependency accounts. We also aim to uncover gaps in the conceptual and empirical research and suggest areas of fruitful future research.
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More and more boards are tapping interim CEOs to temporarily fill the corner office. Prior research indicates the negative performance implications of this decision; yet, little is known about the rationale behind this decision. Our aim is to fill this research gap. Drawing on agency and human capabilities frameworks, we examined the contextual elements that influence a board's decision to pursue temporary leadership. Within a sample of 375 successions occurring between 1998 and 2005, we found that boards of directors were more likely to select interim CEOs under certain succession conditions, namely, when the prior CEO was forced out and there was no heir apparent or when the prior CEO had served for a short tenure. Our results highlight the importance of context in succession selections and provide insights into why a board would pursue a decision with seemingly negative repercussions. Implications for theory and practice are discussed. At a time when boards of directors are under increasing pressure to develop comprehen-sive succession plans to select the " right " CEO, a new trend has emerged—the selection of interim CEOs (Ballinger & Marcel, Acknowledgment: We are grateful for the comments and recommendations from the editor Sucheta Nadkarni and two anonymous reviewers.
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A significant amount of research has examined firms’ decisions to adopt poison pills; however, firms today are increasingly repealing or allowing poison pills to expire. Based on agency theory, the authors examine competing perspectives of governance mechanisms as having complementary or substitutive effects within the context of poison pill repeal. They test whether firms repeal poison pills when governance is strong (complementary effects) or allow for other governance mechanisms to compensate for potential agency costs associated with poison pill renewal (substitutive effects). Using a sample of 288 firms who made decisions to terminate or renew poison pills, the authors find that firms with CEO duality, fewer directors nominated by the CEO, and higher levels of outside director ownership and pressure-resistant institutional shareholdings are more likely to repeal poison pills. A curvilinear relationship between managerial ownership and poison pill repeal is also found. The results provide greater support for the notion that firms use governance mechanisms as complements rather than substitutes.
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If an organization’s management is caught in the act of misconduct, it may call for a changing of the guard. Surprisingly, though, there is little empirical evidence examining the presumed benefits of executive turnover in the aftermath of wrongdoing. In this study, we explore investor reactions to CEO turnover following financial misrepresentation. We theorize and find that firms can be successful at managing investor reactions to organizational misconduct by either scapegoating or signaling change, but middle-ground approaches that do not commit to one or the other are less successful. We test our ideas in a firm-level event study of market reactions to CEO successions following a material financial statement restatement. We discuss the results, which generally support our predictions, and their implications for development of the scapegoating and signaling literatures and research on both executive succession and restoring corrupt organizations.