Internal Disruption: Examining the Relationship Between Interim CEO Successions and Executive Turnover

Research Question/IssueAlthough research on interim CEO successions has increased, there remains limited knowledge about what internal repercussions interim CEO appointments have on firms, notably on incumbent executives. This study seeks to understand whether and how interim CEO appointments are related to executive turnover, focusing on the role and involvement of the board in the interim succession process.Research Findings/InsightsInterim CEO successions are related to higher executive turnover compared to direct CEO successions. This turnover is further augmented either when the preceding CEO was fired or when the interim CEO is also the board chair. We also find that, when the preceding CEO was fired, the executive turnover related to interim CEO successions is related to poorer subsequent firm performance.Theoretical/Academic ImplicationsThis research fills an important gap in the interim CEO succession literature, focusing on the internal repercussions of interim CEO appointments, particularly how incumbent executives may be affected and how this may influence firm performance. It reconciles the view that interim CEOs may engage in limited decision-making, whereas the board uses the interim period to plan for the firm's future.Practitioner/Policy ImplicationsThis paper highlights the potential disruptions caused by interim CEO successions and offers some insights into how these may affect executives and firm performance. Moreover, this paper acts as a guide for stakeholders on the nuanced governance decisions around interim CEO appointments.