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Research summary: Investing a firm's resources in corporate social responsibility (CSR) initiatives remains a contentious issue. While research suggests firm financial performance is the primary driver of CEO dismissal, we propose that CSR will provide important additional context when interpreting a firm's financial performance. Consistent with this prediction, our results suggest that past CSR decisions amplify the negative relationship between financial performance and CEO dismissal. Specifically, we find that greater prior investments in CSR appear to expose CEOs of firms with poor financial performance to a greater risk of dismissal. In contrast, greater past investments in CSR appear to help shield CEOs of firms with good financial performance from dismissal. These findings provide novel insight into how CEOs' career outcomes may be affected by earlier CSR decisions. Managerial summary: In this study, we examined a potential personal consequence for CEOs related to corporate social responsibility (CSR). We explored the role prior investments in CSR play when a board evaluates the firm's financial performance and considers whether or not to fire the CEO. Our results suggest that while financial performance sets the overall tone of a CEO's evaluation, CSR amplifies that baseline evaluation. Specifically, our results suggest that greater past investments in CSR appear to (a) greatly increase the likelihood of CEO dismissal when financial performance is poor, and (b) somewhat reduce the likelihood of CEO dismissal when financial performance is good. Thus, striving to deliver profits in a socially responsible manner may have both positive and negative personal consequences. Copyright © 2017 John Wiley & Sons, Ltd.

Health and Human Services Secretary Robert F. Kennedy Jr. described on Sept. 4 why he fired CDC director Susan Monarez.

While poor firm performance has been shown to be a predictor of CEO dismissal, little is known about the role of external constituents on the board's decision to dismiss the firm's CEO. In this study, we propose that investment analysts, as legitimate third-party evaluators of the firm and its leadership, provide certification as to the CEO's ability, or lack thereof and thus help reduce the ambiguity associated with the board's evaluation of the CEO's efficacy. In addition, the board tends to respond to investment analysts because their stock recommendations influence investors, whom the board wants to appease. Using panel data on the S&P 500 companies for the 2000-2005 period, we find that negative analyst recommendations result in a higher probability of CEO dismissal.

Worker attrition is a costly and operationally disruptive challenge throughout the world. Although large bodies of research have documented drivers of attrition and the operational consequences of attrition, managers still lack an integrated approach to understanding attrition and making decisions to address it on a forward-going basis. To fill this need, we build a structural model that both captures the firm's decision to terminate a worker's employment (involuntary attrition) and uses an optimal stopping problem process to model a worker's decision to leave the firm (voluntary attrition). We then estimate the parameters of the model and conduct counterfactual analyses on the population of 1,118 agents serving one client over 3 years for an Indian business process management company. Our model reveals a number of interesting findings. We find that supervisors have a strong impact on whether employees stay because they reshape the way that agents make their decisions. We also find that the impact of supervisors on agent attrition is more significant than the impact of salary. For example, increasing salary by 20% decreases the total attrition level by 5%. However, if agents were managed by the best supervisors, among those that manage similar agents, the attrition rate decreases by 10%. Altogether, our paper contributes to the burgeoning literature on people operations and managerial practice.

Worker attrition is a costly and operationally disruptive challenge throughout the world. Although large bodies of research have documented drivers of attrition and the operational consequences of attrition, managers still lack an integrated approach to understanding attrition and making decisions to address it on a forward-going basis. To fill this need, we build a structural model that both captures the firm's decision to terminate a worker's employment (involuntary attrition) and uses an optimal stopping problem process to model a worker's decision to leave the firm (voluntary attrition). We then estimate the parameters of the model and conduct counterfactual analyses on the population of 1,118 agents serving one client over 3 years for an Indian business process management company. Our model reveals a number of interesting findings. We find that supervisors have a strong impact on whether employees stay because they reshape the way that agents make their decisions. We also find that the impact of supervisors on agent attrition is more significant than the impact of salary. For example, increasing salary by 20% decreases the total attrition level by 5%. However, if agents were managed by the best supervisors, among those that manage similar agents, the attrition rate decreases by 10%. Altogether, our paper contributes to the burgeoning literature on people operations and managerial practice.

When contracts are incomplete, dismissal laws prevent employers from arbitrarily discharging employees and thereby limit employers’ ability to hold up innovating employees after an innovation is successful. Therefore, dismissal laws can enhance employees’ innovative efforts and encourage firms to invest in risky but potentially groundbreaking projects. Other forms of labor laws that do not affect dismissal of employees do not have this bright side. We find support for these predictions in empirical tests that exploit country-level changes in dismissal laws in the United States, the United Kingdom, France, and Germany: more stringent dismissal laws foster innovation, particularly in innovation-intensive industries, but other labor laws do not.

Research summary: We argue that firms with greater specificity in knowledge structure need to both encourage their CEOs to stay so that they make investments with a long-term perspective, and provide job securities to the CEOs so that they are less concerned about the risk of being dismissed. Accordingly, we found empirical evidence that specificity in firm knowledge assets is positively associated with the use of restricted stocks in CEO compensation design (indicating the effort of CEO retention) and negatively associated with CEO dismissal (indicating the job securities the firm committed to CEOs). Furthermore, firm diversification was found to mitigate the effect of firm-specific knowledge on both CEO compensation design and CEO dismissal, as CEOs are more removed from the deployment of knowledge resources in diversified firms. Managerial summary: A firm's knowledge structure, that is, the extent to which its knowledge assets are firm-specific versus general, has implications for both CEO compensation design and CEO dismissal. In particular, we find that a firm with a high level of firm-specific knowledge has the incentive to retain its CEO through the use of restricted stocks in CEO compensation. Such a firm is also likely to provide job security for its CEO, leading to a lower likelihood of CEO dismissal. These arguments, however, are less likely to hold in diversified corporations as CEOs in such corporations are more removed from the deployment of knowledge assets. A key managerial implication is that CEO compensation and job security design should be made according to the nature of firm knowledge assets.

A Justice Department employee has been fired after he was arrested for allegedly throwing a sandwich at a federal law enforcement officer, AG Bondi says.

In this study, we address the question of why some CEOs stay in office during a performance downturn while others don't. Taking a social status perspective, we argue that an individual's board network embeddedness — as reflected in the number of outside directorships — plays an important role in dismissal decisions. We predict that a high status of the CEO relative to the chairman of the board protects an underperforming CEO against dismissal, while the relative salience of board network outsiders can counter this effect. Using longitudinal data of large German corporations, we find support for our predictions. Ltd.

Why are some newly appointed CEOs (i.e., those with tenure of three years or less) dismissed while others are not? Drawing upon previous reseach on information asymmetry and adverse selection in CEO selection, I argue that the board of directors may make a poor selection at the time of CEO succession, and as a result must dismiss the appointee after succession when better information about him/her is obtained. Therefore, the level of information asymmetry at the time of succession increases the likelihood of dismissal. With data on 204 newly appointed CEOs, the results of this study support this argument. After controlling for alternative explanations of CEO dismissal (e.g., firm performance and political factors), the results show that the likelihood of dismissal of newly appointed CEOs is higher in outside successions and/or if the succession follows the dismissal of the preceding CEO. Further, if at the time of succession, the firm's board has a nominating committee that is independent and/or on which outside directors have few external directorships, the likelihood of dismissal is lower. Contributions to the CEO dismissal/succession literature are discussed.