CEO succession, strategic change, and post-succession performance: A meta-analysis☆

The relationship between CEO succession and firm outcomes is often examined through the disruption or adaptation perspectives. These two perspectives, however, have evolved separately. We propose that findings from these separate streams of research can be integrated, and thus a more holistic understanding of CEO succession can be afforded, through focusing on the central factor responsible for their differences—distinct temporal foci of these streams. The disruption perspective suggests CEO succession imposes costs on organizations, which influences short-term performance. The adaptation perspective suggests CEO succession requires time for effects to manifest, which implies a lagged effect on performance. Based on a meta-analysis of 60 samples from 1972 to 2013 representing 13,578 successions, we find CEO succession negatively influences performance in the short-term and has no significant direct influence on long-term performance. Long-term performance effects, instead, are mediated by strategic change and new CEO origin (inside vs. outside the firm). Inside CEOs improve long-term performance and engage in less strategic change, while hiring an outside CEO leads to more strategic change that results in lower long-term performance. Forced or unforced turnover is not related to short- or long-term performance. Board independence influences relationships between forced turnover and firm performance, as well as CEO origin and strategic change.