Old captains at the helm: chairman age and firm performance

Wälchli, Urs; Zeller, Jonas (2013). Old captains at the helm: chairman age and firm performance. Journal of banking & finance, 37(5), pp. 1612-1628. Amsterdam: Elsevier 10.1016/j.jbankfin.2012.12.012

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This paper examines whether the chairmen of the boards (COBs) impose their life cycles on the firms over which they preside. Using a large sample of unlisted firms, we find a robust negative relation between COB age and firm performance. COBs age much like ‘ordinary’ people. Their cognitive abilities deteriorate, and they experience significant shifts in motivation. Deteriorating cognitive abilities are the main driver of the performance effect that we observe. The results imply that succession planning problems in unlisted firms are real. Mandatory retirement age clauses cannot solve these problems.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Financial Management

UniBE Contributor:

Wälchli, Urs and Zeller, Jonas

Subjects:

600 Technology > 650 Management & public relations
300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0378-4266

Publisher:

Elsevier

Language:

English

Submitter:

Urs Wälchli

Date Deposited:

25 Nov 2013 11:12

Last Modified:

17 Jan 2015 06:01

Publisher DOI:

10.1016/j.jbankfin.2012.12.012

Web of Science ID:

000317167600024

BORIS DOI:

10.7892/boris.38738

URI:

https://boris.unibe.ch/id/eprint/38738

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