Do boards learn about their CEOs in crises? A new study in the Journal of Banking & Finance answers this question

How much do boards learn about CEO ability in crises?

A new study by our Chair shows: Boards use crises to assess the actual management skills of CEOs. Corporate behavior in difficult times acts as a key signal.

Key messages:

• Crises as a test - supervisory boards recognize particularly clearly who demonstrates leadership strength.

• Learning processes in governance - decisions to change CEOs reflect increased information processing.

• What this means for CEOs - Those who show resilience and maintain investments improve their position in the company.

Conclusion:
The study provides important impetus for corporate governance and crisis management. It shows why good leadership is particularly important in difficult times - and how supervisory boards can learn from this.

The link to the study (open access) can be found here: https: //doi.org/10.1016/j.jbankfin.2025.107513