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CEO Succession and Firm Performance: Evidence from Publicly Listed Malaysian Firms

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Author Info

  • Rokiah Ishak

    (School of Accountancy, UUM College of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia)

  • Ku Nor Izah Ku Ismail

    ()
    (School of Accountancy, UUM College of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia)

  • Shamsul Nahar Abdullah

    (Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Jalan Gombak, 53100 Kuala Lumpur, Malaysia)

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    Abstract

    This study investigates the impact of CEO succession on the financial performance of publicly listed Malaysian firms. A match-paired t-test and Wilcoxon signed-rank test are used to determine if there is a change in firm performance following CEO succession. The overall results show that performance improves following post-succession. We also find significant improvement in the performance of companies that experienced forced turnovers and subsequently selected outsiders as successors. On the other hand, forced CEO turnovers that are followed by internal successions disrupt firm performance. As CEO successions impact firms’ future performance, the succession planning process should be a priority for firms.

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    File URL: http://web.usm.my/journal/aamjaf/vol9-2-2013/AAMJAF9-2-art2(29-48)-edited.pdf
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    Bibliographic Info

    Article provided by Penerbit Universiti Sains Malaysia in its journal Asian Academy of Management Journal of Accounting and Finance.

    Volume (Year): 9 (2013)
    Issue (Month): 2 ()
    Pages: 29-48

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    Handle: RePEc:usm:journl:aamjaf00902_29-48

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    Web page: http://web.usm.my/aamj/
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    Related research

    Keywords: CEO succession; post-succession performance; forced turnover; voluntary turnover; internal successor; outside successor;

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