Corporate boards pay attention to the educational qualifications of CEO candidates when making hiring decisions, and replace former CEOs with a new CEO who has a similar educational background. For example, if the former CEO had an MBA degree, then the new CEO is likely to have an MBA degree.
These findings come from the study, "CEO Education, CEO Turnover, and Firm Performance," conducted by Professor Sanjai Bhagat of the Leeds School of Business at the University of Colorado at Boulder. The research was co-authored by Brian Bolton, assistant professor of finance at the Whittemore School of Business and Economics at the University of New Hampshire and Ajay Subramanian of the J. Mack Robinson College of Business at Georgia State University.
Measuring what makes a valuable CEO, though, is costly and difficult task. By looking at CEOs serving the largest firms in the U.S. during the last decade, the study shows how one key factor, CEO education, impacts firm performance and worth.
Read a press release on the stud here: unh.edu/news/cj_nr/2010/sep/lw16degrees.cfm
Read the full white paper here: papers.ssrn.com/sol3/papers.cfm?abstract_id=1670219
Learn more about Professor Sanjai Bhagat here: leeds.colorado.edu/Directory/interior.aspx?id=824