CEO Succession and Firm Performance Dynamics
Summary
CEO succession encapsulates the strategic and procedural dimensions of leadership change at the highest organisational level. The appointment or departure of a chief executive initiates a cascade of governance adjustments, strategic reorientation and market revaluation. Succession events are diverse, ranging from well-planned handovers within a founder’s circle to unanticipated exits driven by illness, dismissal or death. Empirical research has documented that succession type, CEO origin (insider versus outsider) and preceding tenure jointly shape immediate market reactions and subsequent operational performance. Theoretical frameworks draw on agency theory, upper echelons perspectives and dynamic contracting to explain how governance structures—board composition, incentive schemes and monitoring mechanisms—mediate performance fluctuations around turnover. Recent studies further recognise the temporal dimension of CEO influence, revealing that the strength and direction of leadership effects vary across economic cycles and succession contexts. Understanding these dynamics is pivotal for boards seeking to calibrate tenure policies, minimise performance disruptions and harness leadership transitions to drive sustainable growth.
Research from Nature Portfolio
No recent Nature Portfolio content available.
CEO Succession and Firm Performance Dynamics publication trend
The graph below shows the total number of articles in ceo succession and firm performance dynamics across all publications each year (not limited to Nature Index journals).
Technical terms
CEO succession: The process by which a firm replaces its chief executive, encompassing planned transitions and sudden departures.
CEO tenure: The length of time an individual serves as chief executive officer of a firm.
CEO effect: The proportion of variance in firm performance attributed to differences among individual CEOs.
Big bath accounting: The practice of taking unusually large write-offs or restructuring charges in a single period, often coinciding with leadership change.
Managerial entrenchment: The extent to which a CEO accumulates power and becomes insulated from dismissal by the board or shareholders.
References
- CEO tenure: An integrative review and pathways for future research. Corporate Governance An International Review (2021).
- Does the CEO effect differ in times of crisis? Evidence from US and China during the global financial crisis. Journal of Business Research (2024).
- Easy cleanups or forbearing improvements: The effect of CEO tenure on successor’s performance. Journal of Financial Stability (2022).
Turn complex research questions into confident strategic decisions
When you're under pressure to set direction, justify investment, or understand your competitive position, you need more than raw data — you need trusted insights you can act on.
Benchmark your performance against global peers using robust, methodologically sound analysis.
Combine quantitative metrics with qualitative expert insight to uncover strengths, gaps and emerging opportunities.
Gain tailored, decision-ready recommendations aligned to your strategic priorities.
Talk to us to learn more about our data dashboards and bespoke strategy reports.
Grow research skills, confidence and careers with training built for every stage of the research lifecycle.
Developed with Nature Portfolio journal Editors and internationally renowned experts. Discover three ways to learn:
Self-paced, online courses in convenient bite-sized units, covering key skills across scientific writing, publishing, grant writing, data analysis, and more.
Expert trainer-led workshops with hands-on exercises and real-time feedback across core research skills, delivered via interactive group sessions.
Editor-led workshops combining core principles in writing and publishing, personalised 1:1 feedback from Nature Portfolio Editors and hands-on exercises.
Explore course catalogues and workshop agendas, enquire about the options or request institutional pricing.