So close and yet so far: Promotion versus exit for CEO heirs apparent

"Heirs apparent" are frequently a central component of CEO successions but have been largely ignored in the succession literature. Our study examines heir apparent tenures and two contrasting outcomes-promotion to CEO and fir m exit. We propose that the distribution of power among an incumbent CEO, o utside directors, and an heir apparent influences these outcomes. Results s uggest that outside director and CEO power are important influences on heir promotion and exit and that heirs who arise from within a firm are less li kely to exit.