Why CEOs jump ship (or not) when a firm is failing

It’s a fairly common practice in the corporate world, that as a company begins to falter, it is seldom very long before the boss is punted out the door.  Of course, sometimes the CEO jumps before they’re pushed, which is something driven by their ‘social capital’.

That’s the finding of a recent study from the University of Arizona.  They define social capital as the strength of social relationships with colleagues and external stakeholders.  They found that if the boss has strong social capital, they are less likely to voluntarily jump ship.  Interestingly however, those at the opposite end, ie with minimal social capital, were also not very likely to voluntarily leave.  It was those somewhere in the middle that were most likely to walk when things got tough.

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