Firm performance and the adoption of a co-CEO structure: Evidence from Korea

Seung Weon Yoo, Gun Lee (), Jae Eun Shin and Jinbae Kim
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Seung Weon Yoo: Korea University Business School
Gun Lee: Changwon National University
Jae Eun Shin: Korea University
Jinbae Kim: Korea University Business School

Asia Pacific Journal of Management, 2021, vol. 38, issue 4, No 7, 1368 pages

Abstract: Abstract In this study, we examine the relationship between past firm performance and the likelihood of co-CEO adoption. Using Korean data for the period 2003 to 2018, we find that poorly performing firms are more likely to appoint multiple CEOs and adopt shared leadership. This provides evidence that owners add CEOs to the firm in order to penalize the poor performance of the incumbent sole CEO. In addition, a comparison of firms that replace an existing sole CEO with another versus those that newly adopt a co-CEO structure shows that firms exhibiting extremely bad performance are more likely to choose the former option. Furthermore, we divide the sample by type of co-CEO structure and find that poor performance by a sole CEO is more likely to be a cause of the type that indicates a dilution of authority for the existing sole CEO.

Keywords: Co-CEO; CEO change; Firm performance; South Korea (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10490-020-09713-1

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