This paper examines the role of the financial reporting environment in selecting a new CEO from within versus outside the organization. Weak reporting controls allow the CEO to misreport performance information, which reduces the board's ability to detect and replace poorly-performing CEOs as...

This paper examines the role of the financial reporting environment in selecting a new CEO from within versus outside the organization. We show that a CEO's ability to manipulate performance information renders it more difficult for the board to detect and replace poorly performing CEOs as well...

It is widely believed that the ideal board in corporations is composed almost entirely of independent (outside) directors. In contrast, this paper shows that some lack of board independence can be in the interest of shareholders. This follows because a lack of board independence serves as a...