CEO characteristics and corporate turnaround: evidence from Australia

Abstract

This study explores the role of strategic leadership in declining firms by empirically examining the association between various CEO characteristics such as duality, tenure, interlocking, founder status, functional background and the turnaround outcome for the firm. Using a match-pair sample of 94 turnaround and 94-non-turnaround Australian firms, results show that turnaround firms are more likely to have CEOs that are also board chairpersons, have more external board appointments and short tenures. In contrast, any significant association between a CEO’s functional background, founder status and likelihood of turnaround was not identified. Overall, the findings provide further empirical support for the role of CEOs strategic leadership in shaping organisational outcomes especially when companies are under performing.