The board of directors is responsible for ensuring that correct management is in place to run the organization. This includes hiring, evaluating, and — when circumstances merit — removing or replacing the chief executive officer. This Quick Guide reviews the process by which the board carries out this function. It provides answers to the questions: How are qualified CEOs identified? What skills and experiences are needed? Are “inside” CEOs better than “outsiders”? How do boards plan for succession? What models or approaches do they use?
Copyright held by David F. Larcker and Brian Tayan. Further inquiries about reproduction and use should be directed to the Corporate Governance Research Initiative.
