[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-135374-en":3,"doc-seo-135374-105":31,"detail-sidebar-cat-0-en-105":92},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":28,"seo_description":14,"update_tm":29,"read_time":30},135374,7971461740886,"Theodore","https://ap-avatar.wpscdn.com/davatar_3d24733baf745e90a7e4bdd5f77d97b2",8,"Research & Report","Are CEO's Fired for Bad Luck? - Prof. Francesca Cornelli, London Business School","CEO turnover has risen sharply over the last two decades, with studies documenting higher turnover rates and declining average tenures. Research on corporate governance links performance-sensitive turnover to boards being active and effective, showing that poor performance can trigger CEO dismissal followed by improved results. However, evidence also suggests turnover may respond to market conditions and that outsider directors face information constraints. Comparing public and private firms, including private equity-backed deals, further challenges whether turnover sensitivity reliably signals good governance.","Are CEO's Fired for Bad Luck?  \nProf. Francesca Cornelli, London Business School  \nWhat is happening to CEO turnover?  \n• CEO turnover has increased dramatically in the last 20 years.  \n• Already in 2002, a study by Booz & Company showed that CEO succession in the world’s 2,500 largest public companies turnover increased by 53% from 1995 to 2001, performance induced turnover increased by 130% and the average tenure of CEOs declined from 9 .5 to 7 .3 years. Europe had the highest turnover.  \n• Kaplan and Minton (2012) look at Fortune 500 firms and find that turnover is 12.6% in the period 1992-99, implying average tenure of 7.9 years, but since 2000 turnover increases to 16.8%, implying average tenure of 6 years.  \nWhat is happening to CEO turnover?  \n• Kaplan and Minton (2012) also show that turnover is very sensitive to performance and so do several other papers.  \n• Jenter and Lewellen (2014) drop the distinction between voluntary and forced turnover and just look at turnover induced by poor performance and find that almost 40% of all turnover is performance induced.  \n• In general, the corporate governance literature interprets a high CEO turnover and especially a high sensitivity of CEO turnover to performance as the sign of an active and effective board.  \n• In support of this, the literature on corporate governance has shown that boards fire CEOs following poor performance and that performance improves afterwards. Is this enough to conclude turnover (or its sensitivity) is a sign of good corporate governance?  \n• Jenter and Kanaan (2015) argue that forced CEO turnover increase following low industry stock returns and low market returns.  \n• Kaplan and Minton (2012) also show that boards do not index CEO turnover to the industry or the market. Are thus CEOs punished for bad luck?  \n• In addition, the corporate governance literature has shown that the sensitivity of CEO turnover to performance increases when more outside directors sit on the board.  \n• Thus, outside directors are seen as non-entrenched and more likely to act in the interest of the shareholders.  \n• An alternative view is that outside directors do not have enough inside information about the role of the board to base their decision on anything else but publicly observed performance.  \n• Therefore, are outsiders better monitor (the monitoring hypothesis) or do they rely on the only (imperfect) information they have (the inside information hypothesis)?  \nLooking beyond public companies  \n• All the literature covered so far focuses on public companies.  \n• Can we learn something from different types of ownership?  \n• Gao, Harford and Li (2015) compare private and public companies.  \n• Cornelli and Karakas (2016) and Cornelli, Kominek and Ljungqvist (2013) look at private companies with a private equity investment.  \nLooking beyond public companies  \n• Why public to private?  \n– Some firm characteristics remain the same while the corporate governance changes.  \n• Why private equity?  \n– Private equity supporters claim it has superior corporate governance.  \n– Outsider directors are replaced by private equity partners who (1) like outside directors are not `friends’of the CEO, but  \n(2) are heavily involved in the firm operation and therefore will have inside information of the firm.  \nCEOs turnover in private companies  \n• Gao, Harford and Li (2015) find that public firms have higher turnover rates and higher turnover-performance sensitivity.  \n• Does it mean public firms have better corporate governance?  \n• But performance improvement following turnover is larger for private firms.  \n• Cornelli and Karakas (2016) find that when a company is taken private in an LBO the CEO turnover decreases and it is less sensitive to performance.  \n• These results put into question the usual conclusion that a higher turnover or a higher sensitivity to performance is a good sign of corporate governance.  \nCornelli-Karakas: CEO Turnover in LBOs:  \nThe Role of Boards  \n• Hand-c","cbCaiaCwgOBdRkKQ","https://ap.wps.com/l/cbCaiaCwgOBdRkKQ","pdf",608327,2,1,27,"English","en",105,"# CEO turnover trends\n## Evidence from large-firm datasets\n# Interpretation from corporate governance literature\n## Monitoring versus inside-information hypotheses\n## Do outsiders matter?\n# Looking beyond public companies\n## Public-to-private and private equity rationales\n## CEO turnover in private firms and LBOs\n# Cornelli-Karakas: CEO turnover in LBOs: the role of boards\n## Data and board reconstruction approach\n## Director categories and matching firms","[{\"question\":\"How has CEO turnover changed over the past 20 years?\",\"answer\":\"CEO turnover increased dramatically, and performance-induced turnover rose as CEO tenure declined. Evidence cited shows larger turnover sensitivity to performance in more recent periods.\"},{\"question\":\"Why does corporate governance research link performance sensitivity to board effectiveness?\",\"answer\":\"The literature interprets high CEO turnover, especially strong sensitivity to performance, as a sign of active board oversight. It also reports that after dismissals tied to poor performance, performance can improve.\"},{\"question\":\"Are CEOs punished for bad luck rather than poor performance?\",\"answer\":\"Some arguments suggest forced turnover rises when stock and market returns are low, while boards may not fully adjust turnover to industry or market conditions. This raises the possibility that turnover can reflect more than firm-specific performance.\"}]","Are CEO's Fired for Bad Luck? - Prof. Francesca Cornelli, London Business School | PDF",1787310400,68,{"code":4,"msg":32,"data":33},"ok",{"site_id":25,"language":24,"slug":34,"title":13,"keywords":35,"description":14,"schema_data":36,"social_meta":87,"head_meta":89,"extra_data":91,"updated_unix":29},"are-ceos-fired-for-bad-luck-prof-francesca-cornelli-london-business-school","",{"@graph":37,"@context":86},[38,54,69],{"@type":39,"itemListElement":40},"BreadcrumbList",[41,45,48,51],{"item":42,"name":43,"@type":44,"position":21},"https://docshare.wps.com","Home","ListItem",{"item":46,"name":47,"@type":44,"position":20},"https://docshare.wps.com/document/","Document",{"item":49,"name":12,"@type":44,"position":50},"https://docshare.wps.com/document/research-report/",3,{"item":52,"name":13,"@type":44,"position":53},"https://docshare.wps.com/document/are-ceos-fired-for-bad-luck-prof-francesca-cornelli-london-business-school/135374/",4,{"url":52,"name":13,"@type":55,"author":56,"headline":13,"publisher":58,"fileFormat":61,"inLanguage":24,"description":14,"dateModified":62,"datePublished":63,"encodingFormat":61,"isAccessibleForFree":64,"interactionStatistic":65},"DigitalDocument",{"name":9,"@type":57},"Person",{"url":42,"name":59,"@type":60},"DocShare","Organization","application/pdf","2026-08-23","2026-08-21",true,{"@type":66,"interactionType":67,"userInteractionCount":20},"InteractionCounter",{"@type":68},"ViewAction",{"@type":70,"mainEntity":71},"FAQPage",[72,78,82],{"name":73,"@type":74,"acceptedAnswer":75},"How has CEO turnover changed over the past 20 years?","Question",{"text":76,"@type":77},"CEO turnover increased dramatically, and performance-induced turnover rose as CEO tenure declined. Evidence cited shows larger turnover sensitivity to performance in more recent periods.","Answer",{"name":79,"@type":74,"acceptedAnswer":80},"Why does corporate governance research link performance sensitivity to board effectiveness?",{"text":81,"@type":77},"The literature interprets high CEO turnover, especially strong sensitivity to performance, as a sign of active board oversight. It also reports that after dismissals tied to poor performance, performance can improve.",{"name":83,"@type":74,"acceptedAnswer":84},"Are CEOs punished for bad luck rather than poor performance?",{"text":85,"@type":77},"Some arguments suggest forced turnover rises when stock and market returns are low, while boards may not fully adjust turnover to industry or market conditions. This raises the possibility that turnover can reflect more than firm-specific performance.","https://schema.org",{"og:url":52,"og:type":88,"og:title":13,"og:site_name":59,"og:description":14},"article",{"robots":90,"canonical":52},"index,follow",{"doc_id":7,"site_id":25},{"code":4,"msg":5,"data":93},[94,98,102,106,111,116,121,124,129,132,136],{"id":21,"doc_module":4,"doc_module_name":47,"category_name":95,"show_sort_weight":96,"slug":97},"Story & Novel",90,"story-novel",{"id":20,"doc_module":4,"doc_module_name":47,"category_name":99,"show_sort_weight":100,"slug":101},"Literature",80,"literature",{"id":53,"doc_module":4,"doc_module_name":47,"category_name":103,"show_sort_weight":104,"slug":105},"Exam",70,"exam",{"id":107,"doc_module":4,"doc_module_name":47,"category_name":108,"show_sort_weight":109,"slug":110},5,"Comic",60,"comic",{"id":112,"doc_module":4,"doc_module_name":47,"category_name":113,"show_sort_weight":114,"slug":115},6,"Technology",50,"technology",{"id":117,"doc_module":4,"doc_module_name":47,"category_name":118,"show_sort_weight":119,"slug":120},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":47,"category_name":12,"show_sort_weight":122,"slug":123},30,"research-report",{"id":125,"doc_module":4,"doc_module_name":47,"category_name":126,"show_sort_weight":127,"slug":128},9,"Religion & Spirituality",20,"religion-spirituality",{"id":127,"doc_module":4,"doc_module_name":47,"category_name":130,"show_sort_weight":127,"slug":131},"World Cup","world-cup",{"id":133,"doc_module":4,"doc_module_name":47,"category_name":134,"show_sort_weight":133,"slug":135},10,"Lifestyle","lifestyle",{"id":137,"doc_module":4,"doc_module_name":47,"category_name":138,"show_sort_weight":107,"slug":139},19,"General","general"]