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Who disciples the CFO? An assessment of stakeholder power in corporate governance

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  • Bremer, Diedrich
  • Lüdtke, Jan-Philipp
  • Richter, Ansgar
  • Schäfer, Utz

Abstract

We analyze the respective influence of employee and shareholder interests on the dismissal of 89 Chief Financial Officers (CFOs) of major German companies between 1999 and 2006. Drawing on stakeholder-agency theory, we argue that employees wield sufficient power to affect executive replacements. We show that the provision of job security as a proxy for employee interests has a significant effect on the likelihood of CFO dismissal. This effect is independent of the fulfillment of shareholders’ objectives. We conclude that stakeholder groups beyond shareholders exert influence on corporate governance. We argue that executives need to respond to several stakeholder groups simultaneously.

Suggested Citation

  • Bremer, Diedrich & Lüdtke, Jan-Philipp & Richter, Ansgar & Schäfer, Utz, 2009. "Who disciples the CFO? An assessment of stakeholder power in corporate governance," MPRA Paper 15782, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:15782
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    References listed on IDEAS

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    Cited by:

    1. Zeidan, Rodrigo & Müllner, Jakob, 2015. "Firm, market and top management antecedents of speculation: Lessons for corporate governance," Journal of Multinational Financial Management, Elsevier, vol. 32, pages 42-58.

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    More about this item

    Keywords

    Corporate Governance; Stakeholder influence; Management dismissal;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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