How much do boards learn about CEO ability in crises? Evidence from CEO turnover

IF 3.8 2区经济学 Q1 BUSINESS, FINANCE

Journal of Banking & Finance Pub Date : 2025-07-01 DOI:10.1016/j.jbankfin.2025.107513

Peter Schäfer

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引用次数: 0

Abstract

I present evidence from CEO turnover decisions suggesting that boards update their beliefs about CEO ability more in industry crises than in booms. Consistent with predictions from an extended learning model that allows for increased productivity of CEO ability in crises, I find that the turnover-performance relation is weaker the more often the board has observed the CEO in past crises, and crisis performance reduces future dismissal risks more than boom performance. These effects persist after controlling for CEO entrenchment and firm effects, and they are stronger for more severe and recent crises. Employing a proxy of CEO ability, I also find that the dismissal risk of weak-ability CEOs is highest in crises. The results help refine our models of how boards learn about CEO ability and, in particular, help explain the turnover puzzle, i.e., why boards are more likely to dismiss CEOs in industry downturns: rather than misattributing poor industry conditions to CEOs, boards view performance in crises as a more informative signal of CEO ability than performance in booms.

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董事会对CEO在危机中的能力了解多少？来自CEO离职的证据

我提供的证据表明，在行业危机时期，董事会更新他们对CEO能力的看法比在繁荣时期更多。与扩展学习模型的预测一致，该模型允许在危机中提高CEO能力的生产率，我发现董事会在过去的危机中观察CEO的频率越高，离职与绩效的关系就越弱，危机绩效比繁荣绩效更能降低未来解雇的风险。在控制了CEO堑壕效应和企业效应后，这些效应仍然存在，而且在更严重和最近的危机中更为明显。通过对CEO能力的评估，我还发现，在危机中，能力较弱的CEO被解雇的风险最高。这些结果有助于完善我们关于董事会如何了解CEO能力的模型，特别是有助于解释人员流失之谜，即为什么董事会更有可能在行业低迷时期解雇CEO：与其将糟糕的行业状况错误地归咎于CEO，董事会认为危机时期的表现比繁荣时期的表现更能说明CEO的能力。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Banking & Finance Multiple-

CiteScore

6.40

自引率

5.40%

发文量

262

期刊介绍： The Journal of Banking and Finance (JBF) publishes theoretical and empirical research papers spanning all the major research fields in finance and banking. The aim of the Journal of Banking and Finance is to provide an outlet for the increasing flow of scholarly research concerning financial institutions and the money and capital markets within which they function. The Journal''s emphasis is on theoretical developments and their implementation, empirical, applied, and policy-oriented research in banking and other domestic and international financial institutions and markets. The Journal''s purpose is to improve communications between, and within, the academic and other research communities and policymakers and operational decision makers at financial institutions - private and public, national and international, and their regulators. The Journal is one of the largest Finance journals, with approximately 1500 new submissions per year, mainly in the following areas: Asset Management; Asset Pricing; Banking (Efficiency, Regulation, Risk Management, Solvency); Behavioural Finance; Capital Structure; Corporate Finance; Corporate Governance; Derivative Pricing and Hedging; Distribution Forecasting with Financial Applications; Entrepreneurial Finance; Empirical Finance; Financial Economics; Financial Markets (Alternative, Bonds, Currency, Commodity, Derivatives, Equity, Energy, Real Estate); FinTech; Fund Management; General Equilibrium Models; High-Frequency Trading; Intermediation; International Finance; Hedge Funds; Investments; Liquidity; Market Efficiency; Market Microstructure; Mergers and Acquisitions; Networks; Performance Analysis; Political Risk; Portfolio Optimization; Regulation of Financial Markets and Institutions; Risk Management and Analysis; Systemic Risk; Term Structure Models; Venture Capital.