Determinants of internal vs. external CEO successions in Malaysian public listed companies

Ishak, Rokiah and Ku Ismail, Ku Nor Izah and Abdullah, Shamsul Nahar (2012) Determinants of internal vs. external CEO successions in Malaysian public listed companies. Asian Academy of Management Journal, 17 (2). pp. 79-96. ISSN 1394-2603

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Abstract

Following a CEO turnover, a company may select an internal or external successor. The objective of this study is to determine if firm performance, board attributes, ownership structure and incumbent power influence the decision of whether to elect an internal or external candidate. Results from logit regression analysis on 145 succession events over a four- year period (2002 to 2005) indicate that firms which are controlled by blockholders tend to select an outsider as the successor. Further, firms that are controlled by family members and disposition their predecessors are more likely to select an insider as the successor. However, firm performance does not affect the selection choice. As far as performance is concerned, this study supports the contingency view which believes that board of directors react differently to similar performance information due to several sociopolitical factors that may moderate the relationship between firm performance and CEO selection choice.

Item Type:	Article (Journal)
Additional Information:	6708/26437
Uncontrolled Keywords:	CEO succession, Corporate performance, Corporate governance
Subjects:	H Social Sciences > HF Commerce > HF5001 Business. Business Administration > HF5387 Business ethics
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Accounting
Depositing User:	Prof. Dr. Shamsul Nahar Abdullah
Date Deposited:	14 Jan 2013 10:19
Last Modified:	15 Jul 2013 13:08
URI:	http://irep.iium.edu.my/id/eprint/26437

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