External CEO Career Variety, Tenure and Corporate Strategy Reform

Abstract

Abstract:

Based on the empirical data about new external CEO of listed companies in the period from 2004 to 2014, this paper examines the impact of external CEO career variety and tenure on the company's strategic reform, as well as the moderating role of the board's power on the relationship between external CEO career variety and corporate strategic reform. The results show:(1) external CEO career variety is positively associated with the company's annual strategic change and strategic distinctiveness (deviance from industry central tendencies); (2) the board's power has a negative moderating effect on the relationship between external CEO career variety and the company's strategic change; (3) external CEO tenure has no significant effect on the strategic annual change, while with the growth of the new CEO's tenure, strategic deviation descends to the lowest when the CEO has held the post for about 3 years and, after that, increases gradually.

Key words: external CEO career variety, tenure, strategy reform, the power of board of directors

Meng Xiangzhan, Zhang Junrui, Bai Xuelian. External CEO Career Variety, Tenure and Corporate Strategy Reform[J]. , 2018, 30(8): 168-181.

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