Decisions and Dynamics in the Upper Echelons: Implications for Firm Governance, Strategy, and Performance

Abstract

This dissertation examines how individuals in the upper echelons of the organization – namely, the board of directors, CEO, and top management team – shape firm governance, strategy, and performance. This dissertation starts with a broad analysis of board effectiveness and then narrows in focus to one particular board responsibility (CEO succession planning), and then one particular type of CEO transition (leapfrog CEO succession) in the two subsequent chapters. Through this dissertation, I advance our understanding of how board directors and executives influence the organizations around them by developing insights into how boards and top management teams operate internally and integrating these insights into large-sample empirical analyses. The first chapter of this dissertation uses a large-sample survey to explore drivers of board effectiveness on three primary board responsibilities. This study emphasizes the role that internal board operations play in explaining directors’ perceptions of their boards’ effectiveness. The second chapter uses a mixed-methodology approach to examine one specific board responsibility: CEO succession planning. This study identifies the basic components of a board-level CEO succession plan and highlights the role of the CEO/board relationship and risk management processes in supporting these processes. The third chapter examines a specific type of CEO transition: leapfrog CEO succession. This study analyzes the environmental antecedents and performance consequences of appointing an internal candidate who is fast-tracked past more senior executives as CEO.