Sky Blog
Each year, a significant number of publicly listed companies in the U.S. face the departure of their CEOs. While these transitions are inevitable, they represent critical moments in a company’s lifecycle, often leading to long-lasting financial and strategic problems when …
Financial theory suggests that a firm with strong corporate governance (e.g., an effective board of directors), keeps a CEO exactly as long as is optimal for the firm. When the firm’s board and other corporate governance mechanisms are ineffective, however, …
Algorithmic trading (AT) is one of the most notable financial innovations in several decades and constitutes a substantial portion of recent trading in stock markets. However, evidence on the economic consequences of AT is mixed. On one hand, prior research …
Evaluating the performance of CEOs is one of the most important tasks of corporate boards of directors. When deciding whether to retain or dismiss CEOs, boards should follow the informativeness principle developed by Holmström (1979) and include all valuable performance …
Shareholder lawsuits have long prompted intense debate. Despite increased corporate democracy and shareholder rights, some commentators argue that shareholder litigation is still a shareholder’s best option to bring about changes. Shareholder litigation can impose personal liability on corporate managers and …
The process of replacing key individuals is crucial to organizations’ performance. This is as true for presidents of countries as it is for CEOs. When a firm announces the departure of a CEO without announcing a successor, the incumbent CEO …
Growing evidence that the personal characteristics of CEOs affect firm policy choices and performance prompts us to investigate the implications of CEO turnover for the value of a company. In a recent paper, we examine whether CEO succession gaps (i.e., …