Ethnic minority CEO turnover: Resource‐based and leadership categorization perspectives

Abstract

Summary We use the resource‐based theory and leadership categorization theory to develop hypotheses about ethnic minority CEO turnover. Using survival analysis, we test the hypotheses and find that, as a group, ethnic minority CEOs at US firms experience only about half of the risk of turnover at any time as do nonethnic minority CEOs. However, the risk is not spread evenly across ethnic minority subgroups. Asian and Hispanic CEOs experience lower risk of turnover than nonethnic minority CEOs. Black CEOs of US firms do not share this reduced risk of turnover. We find that the resource‐based theory is consistent with the turnover experience of Asian and Hispanic ethnic minority CEOs, but that it is not useful for explaining Black CEO turnover. Some implications of our findings are the following: (1) In research, all minorities should not be treated as a single homogenous group, and (2) in practice, it may be useful to increase CEO social capital to lengthen tenure.

Sustained or Not: Does Intellectual Capital Strengthen CEOs and Independent Commissioners on the Sustainability of Their Companies?

“…According to [44] the resource-based theory is a theory that explains the implications of resources that have capabilities and competitive advantages for a company. The resources owned by a company can include tangible and intangible assets that are owned, developed, and used [45,46]. [47] explains that these resources can be added value (value added) for companies that are placed in the company's strategic plans and policies.…”