Past research has consistently shown that separation of CEO and board chair roles has no systematic effect on firm performance. In this study, we introduce the different forms of such separation: apprentice, departure, and demotion. In a study of Standard & Poor's (S&P) 1500 and Fortune 1000 firms, we find that separation of the two leadership roles positively impacts future firm performance when current performance is poor, but negatively impacts future firm performance when current performance is high. We find that this effect is most dramatic for demotion separations. Finally, we test theory about the permanency of CEO-board chair separation. Our results show that the different types of CEO-board chair separation have very distinct consequences.
ASJC Scopus subject areas
- Business and International Management
- Business, Management and Accounting(all)
- Strategy and Management
- Management of Technology and Innovation