Abstract
Corporate governance scholars have long been interested in understanding a critical reality: some former CEOs do not fully leave office, but rather remain as board members. Departing from the inconclusive findings of the Janus face of predecessor CEO retention on the board (RPCB), this article revisits RCPB and their influences on successors and firm performance. This study analyzes a sample set of Taiwanese firms during the period of 2015-2019 by adopting the Heckman two-stage method. The empirical results indicate that RPCB is negatively related to post-succession performance. However, the unfavorable performance effects of RPCB are found to be reduced in the situations of high internal and external complexity, showing that the value of RPCB is situation-specific. Our findings complement the extant research by considering firm complexity and environmental complexity in seeking to illustrate why successors’ needs for regular mentoring are heightened, and regarding which, the benefits become more substantial.
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