Research suggests that boards of directors tend to look outside the firm for the next CEO under which following circumstance?
A) when the company is prosperous
B) when the company is having temporary difficulty
C) when the company is in trouble
D) when the company needs to follow a stability strategy
E) when the company needs to expand in order to continue growing

Question

Quizplus · Accepted Answer

Research suggests that boards of directors tend to look outside the firm for the next CEO when the company is in trouble, such as facing declining profits, loss of market share or other performance difficulties. The board may see an external candidate as having a fresh perspective and new ideas for turning the company around.

Research Suggests That Boards of Directors Tend to Look Outside