The Benefits of Being Friends with the Boss

Balsam, Steven; Kwack, So Yean

doi:10.2139/ssrn.3346520

Cited by 2 publications

(1 citation statement)

References 37 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Cornelli et al (2013) document that boards collect both "hard" (i.e., verifiable) and "soft" (i.e., nonverifiable) information about CEOs' competence when making replacement decisions. Balsam and Kwack (2022) find that the likelihood of promotion increases for subordinate managers if they have connections with the CEO established outside the firm.…”

Section: Introductionmentioning

confidence: 88%

Who shall succeed? An examination of manager overconfidence and CEO selection

Tong

2022

Business Fin & Account

View full text Add to dashboard Cite

By categorizing managerial confidence attributes into overconfidence, rationality and diffidence with the methodology used in the finance literature, we investigate how company boards strategically select chief executive officer (CEO) replacements from the senior management pool with different confidence attributes. In normal retirements, company boards tend to select succeeding managers with the same confidence attribute as retiring CEOs. If boards fire company CEOs, they tend to select rational successors irrespective of the confidence attributes of the ousted CEOs. Such board inclination of picking rational successors also occurs when corporate operation is at the recession stage or corporate strategy is changed surrounding succession. The evidence indicates that the managerial confidence attribute is an important consideration of the board in the CEO selection process and that the board deliberately selects the CEO with a certain attribute to move the firm in a planned direction.

show abstract

Section: Introductionmentioning

confidence: 88%