Forced CEO turnover can damage the reputation of board directors
Research suggests the forced departure of a chief executive may be viewed as a governance failure by shareholders.
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Parting company with an underperforming chief executive is a good thing, right? The fulfilment of a board’s governance responsibilities, and bound to boost their standing? It seems not.
New research suggests that the forced departure of a chief executive may, in fact, undermine the reputation of the other directors involved and be viewed as a governance failure by shareholders.
The conclusions come in a study conducted by Felix von Meyerinck, Jonas Romer and Markus Schmid, from the University of St Gallen in Switzerland, looking at the effects of CEO turnover on director reputation.
Their conclusion casts doubt on whether forcing o
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