Performance Changes Following Top Management Dismissals
David J. Denis and Diana K. Denis
Journal of Finance 50, 1029-1057, 1995

This study examines operating performances of firms prior to and after top management changes. An important function of the labor market is to replace poor performing top managers with better ones. Hence, firm performance prior to top management changes should be poor and that it should improve following these changes. The study documents evidence that supports the above arguments.


What Happens to CEOs After They Retire? New Evidence on Career Concerns, Horizon Problems, and CEO Incentives
James A Brickley, James S. Linck and Jeffrey L. Coles
Journal of Financial Economics 52, 341-377, 1999

Career concerns force managers to perform well since poor performances generally lead to a fall in demand for their services. For retiring CEOs who wished to continue their career as board directors, it is to be expected that they would have strong incentives to perform so as to raise the demand for their services as directors. Consistent with this, this study finds that the possibility of a retired CEO serving on his board as well as the possibility of serving as an outside director on other boards is strongly related to his performances during his tenure as CEO.


New Evidence on the Market for Directors: Board Membership and Pennsylvania Senate Bill 1310
Jeffrey L. Coles and Chun-Keung Hoi
Journal of Finance 58, 197-230, 2003

This study examines the functioning of the labor market for board directors using the unique setting of the Pennsylvania Senate Bill 1310. The Bill is an anti-takeover law that is perceived to be the most sweeping adopted over the last 15 years in the U.S. According to the arguments made in the study, directors that chose not to adopt the anti-takeover bill establish a reputation in the market place as more independent. They should, therefore gain more seats in the future due to their sound reputations. Results in the study are consistent with the above arguments.