Got a plan in the pipeline? Nominating committee’s information processing in executive successions

The purpose of this paper is to examine how information-processing mechanisms between nominating committees (NCs), incumbent executives, board chairs, and shareholders affect the comprehensiveness of executive succession processes.

The authors employ an explanatory multiple-case study that comprises eight CEO and CFO succession cases in large German publicly traded firms.

The findings reveal that comprehensiveness is determined by four key information-processing mechanisms: the effectiveness of NC’s information sharing, absorbing disagreement, and integrating heterogeneous opinions; board chair leadership (i.e. an apprentice board leadership structure in association with the board chair’s openness to ideas); the breadth and depth of information sharing between executives and NCs; and the extent and timing to which major shareholders influence succession processes.

The authors summarize the findings in a conceptual framework and develop a set of propositions to guide future research on the topic. Such studies may want to test the suggestions in a quantitative way, preferably in a multinational context.

The authors’ emerging conceptual framework contributes a set of information-processing variables by which NCs engage in comprehensive executive successions with incumbent executives, board chairs, and major shareholders and offers a multiechelon approach to study executive successions.