We investigate an increasingly prevalent CEO succession strategy: recruiting CEOs from the board of directors (director-CEOs). Director-CEOs might be hired in a planned succession because they combine outsiders' new perspectives with insiders' firm-specific knowledge. Alternatively, directors...

Shareholders pay considerable attention to the choice of executive selected as the new CEO whenever a change in leadership takes place. However, without an inside look at the leading candidates to assume the CEO role, it is difficult for shareholders to tell whether the board has made the...