Title
EXECUTIVE TENURE AND FIRM PERFORMANCE:AN EMPIRICAL EXAMINATION OF THE INDIAN CORPORATE LANDSCAPE
Authors
Abstract
In a typical corporate setting, a CEO is analogous to the captain of a ship with ultimate authorityvested in him by the board of directors of the firm. During the period he heads the firm, it is
expected that he would render his services as a fiduciary of the shareholders. By virtue of being in
the role of a fiduciary, he would be expected to take wise decisions which benefits the firm in
long/short term and the stakeholders of the firm become well off. Chairman is another top
executive who oversees the actions of the CEO. In some cases, both the office of a CEO and
chairman is headed by the same individual known as dual executive. The objective of this study is
to explore the relationship between firm performance and tenure of top executives in the Indian
context. Executive tenure is calculated by the number of years s/he spends in office in that capacity
of a Chairman or a CEO. However, the length of the tenure varies to a great degree from firm to
firm. There can be many factors impacting the duration of tenure of executives in India. So, this
paper attempts to find out the impacts of performance on executive tenures of the firm. Other than
that how much of an effect does various executive specific variables (such as executive age), firm
specific variables (such as age of the firm, group affiliation/stand-alone firm) do have on the tenure
of executives would also be explored. Top executives would be divided into three categories i.e.
CEO/Managing Director, Chairman and Dual (holding both CEO and chairman position) to get
better insight into the research question.
Keywords
Executive tenure, Firm performance, Emerging economy
Classification-JEL
G30, F30, F40
Pages
321-350