7. Labor Market for Executives and CEO Succession Planning

In this chapter, we examine the labor market for executives and the CEO succession process. Corporations have a demand for qualified executives who can manage an organization at the highest level. A supply of individuals exists who have the skills needed to handle these responsibilities. The labor market for chief executives refers to the process by which the available supply is matched with demand. For the labor market to function properly, information must be available on the needs of the corporation and the skills of the individuals applying to serve in executive roles.

The efficiency of this market has important implications on governance quality.1 When it is efficient, the board ...

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