New CEOs and Strategic Change: The Influence of Prior Board Experience

The study explores the effect of new CEOs' prior board experience on strategic change. We develop a theory to explain how prior board experience may affect new CEOs' propensity and ability to initiate strategic change. Specifically, we suggest that prior experience on the focal board will inhibit strategic change, while prior experience on the boards of other firms will facilitate strategic change. We also predict that prior board experience with strategic change at other firms will have a positive impact on strategic change at the focal firm. Using data from a sample of the S&P500 firms from 2003 to 2013, we find that support for our theoretical predictions. Our study contributes to the literatures on strategic change, upper echelons theory, and CEO succession.