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Examining CEO succession and the role of heuristics in early-stage CEO evaluation

Authors


Scott D. Graffin, Terry College of Business, Management Department University of Georgia, Athens, GA 30602, U.S.A. E-mail: sgraffin@uga.edu

Abstract

This study develops and tests predictions regarding factors that influence early-stage CEO evaluation. We suggest that contextual elements of the CEO succession process will influence the heuristics that directors employ to aid in their early evaluation of a CEO because traditional performance metrics, such as firm performance, are less diagnostic of CEO quality in the first years of their tenure. Broad empirical support for our theoretical arguments is shown in a sample of Fortune 1000 firms. Copyright © 2012 John Wiley & Sons, Ltd.

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