Abstract
We challenge the negative view that predecessor retention – the appointment of outgoing CEOs as board chairs – deteriorates post-succession firm performance. We posit that predecessor retention improves post-succession performance in family firms since predecessors are more likely to act as mentors to their successors whereas their counterparts in nonfamily firms tend to behave opportunistically. Exploring variance among family firms, we suggest that successor mentoring is most valuable under a heightened ability of the predecessor to mentor and a pronounced need of the successor for mentoring. Probing a matched sample of 305 CEO successions in S&P1500 firms between 2001 and 2013, our results complement CEO succession research by introducing a CEO mentoring perspective and by differentiating between family and nonfamily firms.
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