Keeping Their Cards Close to Their Chests: How Non-Delegating CEOs Avoid Forced Career Ends

It is a common belief that CEOs must delegate to be successful. We hesitate to support this generalization and investigate how the distribution of responsibility within top management teams (TMTs) can influence the likelihood of a CEO's dismissal. Consistent with an agency theory perspective, our results indicate that CEOs may choose not to delegate their responsibilities to other executive TMT members, so as to benefit from an increased information asymmetry vis-a-vis the board of directors. Taking the resource-based view as a complementary theoretical perspective, we find that non-delegating CEOs benefit from their greater firm-specific knowledge, which the board of directors considers as a valuable resource that should be retained. Our work also demonstrates that a more intense CEO-TMT interaction weakens the relation between non-delegation and the likelihood of CEO dismissal. In sum, our research shows that the CEO's delegation decision does not necessarily lead to a competence distribution that is in the firm's best interest; rather, it reflects a complex interplay between the potentially opportunistic career interests of the CEO, the involvement of other TMT members and the board of directors. (c) 2015 Wiley Periodicals, Inc.