Faculty Publications

Caretakers or Change Agents? How Predecessor Dismissal for Poor Performance Shapes Interim CEO Leadership

Document Type

Article

Keywords

CEO dismissal, CEO selection, CEO succession, Interim CEOs, Strategic change

Journal/Book/Conference Title

International Journal of Organizational Analysis

First Page

1

Last Page

18

Abstract

Purpose – This paper aims to examine whether interim chief executive officers (CEOs) initiate more or less strategic change than permanent CEOs, depending on whether their predecessor was dismissed for poor performance or departed voluntarily. Design/methodology/approach – This study uses ordinary least squares regressions with clustered standard errors among a sample of 5, 144 CEO successions, including 1, 467 following dismissals for poor performance and 3, 677 following voluntary departures. To address potential selection bias, the authors construct a matched sample using propensity score matching (PSM). Findings – The authors find that interim CEOs engage in significantly greater levels of strategic change than permanent CEOs when the preceding CEO was dismissed for poor performance. Practical implications – The study provides practical implications for boards, investors and executives. For boards, the evidence suggests that appointing an interim CEO after a dismissal can be an effective strategy for signalling responsiveness to stakeholders and implementing immediate corrective actions. For investors, the findings caution against the assumption that interim appointments necessarily signal stasis or instability. Finally, for aspiring executives, the results suggest that interim roles can serve as important – though situational – opportunities to demonstrate leadership by enacting significant strategic initiatives. Originality/value – This paper highlights interim CEOs as pivotal agents of change, especially when firms experience the disruption of prior CEO dismissal for poor performance.

Department

Department of Management

Original Publication Date

1-27-2026

DOI of published version

10.1108/IJOA-09-2025-5954

Link to Full Text

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