When Is an Outsider CEO a Good Choice?

In recent years, established corporations such as Siemens, Hershey, 3M and Wrigley recruited new CEOs from outside the company for the first time in more than a century. Both General Motors and Hewlett-Packard have had more than one CEO who was brought in from outside.

But when is an outsider CEO the right choice? Outsider CEOs such as William Perez of Nike and Jeff Nugent of Revlon were hired by boards to lead their companies through major transformations but were not retained by the same boards through a two-year post-succession period. This suggests the possible existence of a paradox in which boards choose outsider CEOs with a presumed mandate for change but soon become dissatisfied with those same outsider CEOs.


Source : http://sloanreview.mit.edu/the-magazine/2012-summer/53408/when-is-an-outsider-ceo-a-good-choice/

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