Abstract: How would leaving a declining firm affect an outgoing executive’s subsequent career? Drawing on resource dependence theory, we resolve the question with a special instance, i.e., whether an outgoing executive will lose outside directorships after exiting a declining firm, with resource dependence theory. We found that outgoing executives are more likely to lose their outside directorships after exiting a declining firm when they have little social and human capital endowments while other executives and directors in the declining firm have abundant. These relationships will be moderated by the social/human capital of other directors in an interlock board and the alternative interlock links between the board and the declining firm. We expect our finding to contribute to both strategic leadership research and practice.

Abstract: Building on signaling theory and the literature on judgment under uncertainties, we examine the effects of bankruptcy on directors’ professional future. We ask if the professional devaluation of directors takes place due to perceived devaluated competency or due to the burden of bankruptcy stigma. Moreover, we investigate if corporate failure unavoidably leads to professional devaluation or, in some cases, the elite labor market actually rewards the experience of bankruptcy. We differentiate among directors associated with the origin of the bankruptcy, its announcement and thee actual management of the bankruptcy, and argue that monitoring a company through the process to bankruptcy is a value-increasing experience and will be rewarded by the executive labor market.

Abstract: We analyze how changes in a firm’s status affect the likelihood of CEO dismissal. Given directors’ concern for their own status, and considering that decreases in a firm’s status may cause its directors own status to deflate, we argue that when a firm loses status, its directors will have a greater likelihood of dismissing the CEO, independently of the firm’s financial performance. Moreover, we suggest that the effect of negative status change is amplified when directors have recently lost external directorships. The possibility of being marginalized from the inner circle would bolster their motivation to take corrective action and dismiss the CEO. Using data on Fortune’s Most Admired Companies from 2007 to 2012, we find strong support for our hypotheses.

Abstract: Recent studies have documented that firms with corporate misconduct tend to dismiss their executives and/or directors. However, we don’t know whether good firm performance may buffer executives/directors from dismissal in the context of corporate misconduct. In this study, we propose that firms with better performance are less likely to dismiss their executives/directors in the context of corporate misconduct than firms with lower performance. We also propose that the buffering effect of good firm performance differs between CEOs and non-CEO executives/directors in that good performance is more likely to protect CEOs than non-CEO executives/directors from being dismissed.