Leaders of publicly traded companies are fired too quickly when share prices go down, and this hurts the firms in the long run, according to a new UBC study featured in the Vancouver Sun.
“When share prices go down, boards need to find a scapegoat — so they fire the CEO to please the shareholders,” said author and Sauder School of Business professor Kai Li.
Ten per cent of public companies replace their CEOs annually, compared to eight per cent of private firms, Li said.
