Qualitative Paradigm

Abstract

Chapter 6 emphasises the qualitative research instrument, description of interview sample, research results, and limitations.

Chapter 6 focuses on the qualitative paradigm of the dissertation. After a synthesis of the previous theoretical chapters, the research gaps, the research questions, and the research strategy, it first introduces the research instrument and the sample description. This is followed by a presentation of the exploratory findings on each of the research questions and an identification of the general limitations of the study.

6.1 Research Instrument

The following section presents detailed information on the interview method (expert interviews), its application, reliability, and validity, as well as the theoretical-methodological background used for the analysis of the collected data.

6.1.1 Expert Interview

The expert interview is the most frequently used research instrument in qualitative studies. The experts have specific knowledge which they not only possess themselves, but that is specific and relevant to the field of study (Meuser & Nagel, 2009, p. 18). The interview method is thus designed to reveal and collect an exclusive wealth of knowledge from various people.

The expert interviews were conducted semi-structured and online (synchronous). The semi-structured interview form enables the interviewer to systematically follow a certain set of questions, yet without losing the flexibility to expand on particular topics (Bell et al., 2019, p. 436). The questionnaire prepared included scientific rigour and was evaluated and tested with scholars and people from the field (instrument pretest). The synchronous online interview method made it possible to conduct the interviews in real time by using software applications. The advantage of online interviews is the opportunity to record (voice and face), the flexibility to make adjustments (ad hoc), time and cost savings (geographical), and the convenience of conducting the interview from home or the office (familiar premises) (Bell et al., 2019, p. 453). In addition to their immense potential, online interviews are expected to gain popularity due to the COVID19 pandemic.

6.1.2 Qualitative Application

The expert interviews took place from February to July 2021. Except for three interviews with participants who explicitly requested that the interview be conducted physically at the organisation’s headquarters, all interviews were conducted remotely via MS Teams, WebEx, or Zoom. The participants were informed in writing that the interviews would be recorded and that the output would be treated anonymously and confidentially (one participant explicitly declined to have the interview recorded). This was implemented accordingly. In general, the interviews took between 60 and 90 minutes.¹

A total of 40 interviews were conducted. The selection of interview partners was based on theoretical guidance (cumulative) and saturation (iterative) (Vollstedt & Rezat, 2019, pp. 83–85). Furthermore, the selection was not statistically representative of the target group, but was contextual. The main purpose was to obtain information from experts with different perspectives for a broader understanding of the topic. In order to gain broad and deep insights and appropriately address the three research questions, the interview participants were thoughtfully selected key players in their field (similar to Fitzsimmons & Callan, 2016, p. 767). The 40 participants were either board members (chairperson, vice-chair, chair nomination committee), previously involved in succession processes (candidate, company secretary, board advisor), or had a direct/indirect influence on the election of the chairperson (financial analyst, proxy advisor).

Similar to other board studies that have collected primary data (e.g. Barth, 2013; Gay, 2001), the semi-structured interview method allows participants personal leeway in addressing the issues related to succession that they consider relevant. The semi-structured questionnaire was sent to participants a few days in advance so that they could, if desired, prepare for the interview individually. To take advantage of the participants’ expertise (functional) and the information gained from previous interviews (content), the questionnaire was slightly modified (see appendix A2 in the electronic supplementary material).²

Overall, the interview contained four dimensional subjects: (1) succession planning (role, planning process, contextual influences); (2) competence (profile and profiling); (3) voluntary disclosure (quality, time, channel); and (4) stakeholder integration (senior management, board advisory, shareholders, proxy advisor).

6.1.3 Qualitative Reliability and Validity

Qualitative reliability refers to the quality and accuracy of the results, whether the findings help to understand a complex phenomenon or explain the purpose and rationale behind certain concepts (Golafshani, 2015, p. 601). Procedures to ensure reliability encompass checking the transcript for obvious mistakes, applying rigor in the definition of codes by continuously comparing them with the data, and cross-checking the codes with those developed by various scholars (Gibbs, 2018, p. 138). Qualitative validity implies consistency in the replication of study results among researchers and research projects (Golafshani, 2015, p. 602). Practical validity procedures involve the use of multiple data sources (triangulation), accentuation of areas with potential subjectivity influence (bias), in-depth development of thematic analysis (time), and accuracy in explaining the findings (description) (Creswell & Creswell, 2018, pp. 200–201).

In general, qualitative reliability and validity are more difficult to determine than quantitative validity and reliability (Section 7.1.3). To further validate the qualitative reliability and validity criteria, the following four alternative evaluations were used in this thesis (Eriksson & Kovalainen, 2015, p. 308): (1) the use of the software programme Atlas.ti, that allows previous coding processes be to traced, compared, and repeated at any time (dependability); (2) the establishment of a logical connection to existing research through the methodical application of a theory elaboration approach (Section 6.1.4; transferability); (3) the identification of conceptual relationships in the data through a previous extensive literature review (credibility); and (4) ensuring the understanding of the conclusion through an in-depth conceptual discussion (conformity). By applying these concepts, it can be assumed that the qualitative analysis in this thesis covers all relevant quantitative reliability and validity aspects.

6.1.4 Methodological Analysis

For a scientifically sound and rigorous analysis of the interview scripts, Glaser and Strauss’ (1967) grounded theory was employed. Grounded theory uses inductive analysis to develop a “theoretical explanation” of the topic under study (Corbin & Strauss, 1990, p. 5). From the theoretical explanation, a set of (new) concepts, categories, hypotheses, or theories can emerge (Bell et al., 2019, p. 525). To model grounded theory, the scholar sorts the interview data transcripts into conceptual indicators and labels and combines these according to related concepts in order to subsequently establish and compare categories (Punch, 2014, p. 180). As a final step (in the coding phase), the researcher then reduces the number of categorical overlaps and redundancies to create a model with aggregated dimensions (Gioia et al., 2013, p. 20). In this process, a constant comparison between the interview data and the conceptualisation is key (Bell et al., 2019, p. 522).

The majority of scholars who engage in grounded research use a theory generation design. In contrast, this thesis employs a theory elaboration design. The concept of theory elaboration ensues “when pre-existing conceptual ideas or a preliminary model drive [the] study’s design” (Lee et al., 1999, p. 164). According to Fisher and Aguinis (2017, p. 441), theory elaboration is thus a conceptual methodology that builds upon preliminary models or pre-existing ideas to gain additional insights into the topic under study. In the field of theory elaboration, it is important to recognise that it is not just about building a new, extended theory. The method can also be used for the “refinement of existing theoretical ideas” (Fisher & Aguinis, 2017, p. 442), i.e. to complement and refine contextual factors, constructs, and/or relationships.

The selection of theory elaboration for this thesis has three reasons.³ First, the general purpose of the thesis is to establish major categories, not a (new) formal theory. Second, the qualitative analysis aims to fill existing research gaps, which serves as a basis for the quantitative paradigm. Reinventing the wheel is thus not the primary purpose, but the goal is to build on existing theories and concepts. Using theory elaboration specifically permits the scholar to apply (or at least consider) prior theoretical constructs in coding. This can be a useful tool to compare established and interrelated concepts. In classical theory generation, in contrast, theoretical cycling between emergent concept dimensions and existing literature should take place (if at all) at the earliest in the constant comparison phase (Gioia et al., 2013, p. 20). In addition, using theory elaboration facilitates the systematic building of connections between research questions (theory) and succession patterns (practice). Third, as emphasised by Fisher and Aguinis (2017, p. 443), applying theory elaboration in succession research has provided remarkable results (e.g. Gephart, 1978).

Subsequently, elaboration theory is applied using the tactic of “new construct specification” (Fisher & Aguinis, 2017, p. 447). This tactic allows for a refinement of the validity and scope of the construct of chairperson succession. To ensure rigour in content analysis and specifically to model grounded theory (see first paragraph in this chapter), open coding, axial coding, and selective coding were the predominant coding procedures (Corbin & Strauss, 1990, pp. 12–15). As a first step, open coding breaks the text into fragments and develops categories of information (in vivo codes). Afterwards, axial coding interconnects the in vivo codes by establishing conceptual similarities (first-order concepts). Finally, selective coding aggregates the concepts and raises the level of abstraction (second-order concepts). Table 6.1 provides a coding example with original interview transcript excerpts.⁴

Table 6.1 Interview − Qualitative Coding Example (PI 5 and PI 25)

6.2 Description of the Interview Sample

To better classify the interview results and, if necessary, to assign statements to specific criteria, the person-related and organisation-related demographics are mentioned below. A breakdown by the two levels provides extended insights.

6.2.1 Person-related Demographics

Of the 40 interview participants, 85% were male and 15% female.⁶ The average interviewee was 60 years old, with the youngest person being 31 and the oldest 76. The wide age range illustrates the purpose of the explorative approach: to achieve the greatest possible diversity and thus strengthen the depth and breadth of knowledge. Moreover, as specified in Figure 6.1, the majority (48%) was 60 years and older, followed by 50−59 years with 38%. The minority was younger than age 50 (14%) and consisted mainly of institutional analysts, board advisors, and proxy advisors.

Figure 6.1

(Source: own illustration)

Interview − Gender (left) / Age (right).

Most interview participants held the position of chair (55%), followed by board advisors (10%), proxy advisors (8%), nomination committee chairs, vice-chairs, CEOs, company secretaries, and analysts (all 5%), and others (1%). In order to provide insights into past processes, a retired board chair (chairperson category), two CEOs and a chairperson from the same organisation (chairperson and CEO category), and a candidate who was shortlisted but rejected (others category) were also interviewed. Again, the various functional positions were chosen on purpose to allow for a broad diversity of responses (Figure 6.2).

Figure 6.2

(Source: own illustration)

Interview − Function.

The many chairpersons, nomination committee chairs, vice-chairs, and CEOs in the sample collectively served on 67 boards (exchange-listed), of which 37 (55%) served as chairpersons and 30 (45%) as ordinary board members. Aggregated, this results in a wealth of experience of 563 years as board members. From the 563 years, 266 years (47%) were served as board chair and 297 years (53%) as ordinary board member. Figure 6.3 thus illustrates, on the one hand, the vast experience of the interview participants and, on the other hand, reflects the age structure with the majority of people being 60 years and older.

Figure 6.3

(Source: own illustration)

Interview − Experience.

6.2.2 Organisation-related Demographics

To further explain the organisational demographics of the interview participants, industry affiliation and market capitalisation are also highlighted. Hereby, only representatives occupying the function of chairperson, vice-chair, nomination committee chair, company secretary, and CEO were included (30 persons in total).⁷ Thereby, the reference point for the statistical analysis was the last position of the person in an organisation with the largest market capitalisation.

Financials (33%), industrials (30%), and health care (13%) were the top three industries represented among interview participants. It is no surprise that the three categories led the field, as they belong to the fundamental pillars of the Swiss economy. Besides the three sectors mentioned above, consumer discretionary (10%), basic materials (10%), and real estate (3%) were also represented. Organisations from the communication services, energy, information technology, and utilities sectors did not participate in the interviews and were thus not represented in the overall exploratory insights (to complete the Global Industry Classification Standard (GICS) list).

Figure 6.4

(Source: own illustration)

Interview − Industry Sector (GICS Classification).

A look at market capitalisation shows that the majority of the organisations surveyed are mid-caps (47%) and large-caps (30%). They are closely followed by mega-caps (10%), small-caps (10%), and micro-caps (3%). Of all the organisation that participated in the survey, none had a market value of less than CHF 50 million (nano-caps). The overview in Figure 6.5 reflects the efforts to increase the number of interviews with persons from organisations with a market capitalisation of more than CHF 2bn, as these organisations are likely to be the focus of stakeholders.

Figure 6.5

(Source: own illustration)

Interview − Market Capitalisation (as of 31^st December 2020).

When interpreting Figure 6.4 (industry) and Figure 6.5 (market capitalisation), it becomes clear that the organisations of the interview participants are capital-intensive businesses that belong to the upper midfield of the SPI in terms of market value. Recognising this is important for understanding the subsequent findings from the interviews.

6.3 Introductory Results

While analysing the interview data, it became apparent early on that the participants were making statements that are relevant to chairperson succession planning but go beyond the underlying research questions. However, as these are relevant factors that indirectly/directly affect the input-process-output paradigm and complement the existing theoretical basis, the decision was made to include them.

Introductory result variables can be described as trigger points for the process cycle, as their presence, absence, or dynamics can be starting and turning points in planning and executing a chairperson search (Section 2.5.1). Overall, the variables relate to contextual factors that allow planning to progress and certain principles to be followed (Section 4.1, Figure 4.2). Table 6.2 shows excerpt examples.

Table 6.2 Interview − Introductory Results Excerpts

As in process theory, the interview excerpts illustrate that chairperson succession has to do with process-specific interconnections and action paths. It seems that it is not only important to maintain process flexibility, but also to take into account personal dimensions such as career plans (PI 38, Table 6.2), relationships (PI 19, Table 6.2), and emotions (PI 24, Table 6.2). Beyond that, the excerpts show that chairperson succession is highly contextual and that input-process-output dimensions adjust to different constraints. Confirming the underlying process framework, succession follows non-linear patterns − as indicated by the cycles in the four-stage succession model (Figure 4.4, Section 4.3.1).

For the qualitative introductory results, in total 137 in vivo codes were identified through open coding. The interconnection procedure of axial coding then reduced them to 17 first-order concepts. Afterwards, those were subsumed into 4 second-order concepts by further constant comparison procedures and theoretical inclusion. Table 6.3 provides an overview of the relationships in place. The final dimensions were process parameters, people parameters, origin, and succession catalysts. In order to understand the results described, four important points should be noted:

First, in terms of process parameters, participants clearly prioritised the nomination committee as the process owner, even though there were several other potential function holders such as the chairperson, vice-chair, or independent director. Participants thus did not consider it appropriate, under best practice circumstances, for the chair to lead his or her own succession. Interviewees justified the choice with independence concerns (PI 16 and PI 22, Table 6.2). However, the board chair should not be completely excluded from the process, but he or she should be integrated as a sparring partner (especially for the chair of the nomination committee). Prioritising independence would also speak in favour of the lead independent director, who is a counterbalance to the chairperson/CEO in the unitary system in the UK (Kakabadse & Kakabadse, 2007, p. 184), but he or she was hardly identified as an option by the interview participants. In addition, interview participants clearly favour a structured and rigorously planned process (mechanistic search, Section 4.1.2). While a long-term strategic planning horizon and candidacy benchmarking are used as adequate tools in the process, assessment centres seem to be rare for the board chair (PI 5, Table 6.2). Although viewed positively and recognised in practice as a suitable tool for senior management succession, the nomination committee refrains from using assessment centres at board chair level, as this could otherwise affect the person’s openness for candidacy (e.g. process withdrawal).

Second, related to people parameters, the chair and the CEO were seen as the “powerhouses” in an organisation (PI 19, Table 6.2). When it comes to succession, participants thus emphasised to pay attention to the timing (asynchronous planning, coordination of origin) and the relationship (personal and business) between the two parties. Thoughtful consideration of those two parameters increases the chance of a successful and smooth transition and ensures continuity at the top of the organisation. Overall, linking the results with other scientific research, e.g. on simultaneous chair/CEO appointment (Davidson et al., 2008) and candidate availability (Clune et al., 2014), validates that people-context variables are causes of changing succession planning cycles.

Third, when asked from where or how the chair should be recruited (origin), several interviewees favoured an internal solution (PI 38, Table 6.2).⁸ Participants thus highlighted the need to prepare an ordinary board member for a possible candidacy. As part of foresighted planning, this means to already include specific chair criteria in the candidacy profile at the time of nomination as an ordinary board member (PI 23, Table 6.2).⁹ If this is the intention, long-term planning is inevitable. In cases with external candidate priority, a transitory year as an ordinary member was often mentioned as an adequate opportunity.¹⁰ This allows familiarisation with board dynamics and getting to know senior management members and key stakeholders in advance. By contrast, a direct takeover of the position of the chair by the CEO, as it was common in the past, was less of an issue. If anything, participants found that a cooling-off period is important.¹¹ Overall, from the answers of the respondents who pointed to the origin of the candidate, the impression was that the succession of the chairperson was planned professionally and more emphasised than that of an ordinary board member or CEO. The very effort that organisations put into pre-planning and the onboarding of external candidates seems to be time-consuming and profound (Roberts, 2002, p. 499).

Fourth, the chairperson succession process is ultimately driven by specific triggers, referred to as catalysts (Section 2.5.1). Clearly, office limitations and resignations can be planned in advance, while urgency (e.g. accident) and dismissal (e.g. voting out) require ad hoc or interim solutions. While protocols exist for the former, dismissal can lead to more exhausting situations since it can result in subjective decision-making and a chaotic process. The latter in particular, in combination with emotions (PI 24, Table 6.2), can influence the process and affect the dynamics within the nomination committee/the board as a whole. Is that the case, then it is even more important to systematically carry out the planning and processing, also with regard to timing (PI 32, Table 6.2).

Table 6.3 Interview − Introductory Results Overview of Codes and Concepts

6.4 RQ1 Results

To assess RQ1 (input-process-output), interview participants were asked what they deemed to be the most important competences, how they differ from those of ordinary board members, and whether and how they had changed over time. Subject to their answers, follow-up questions were asked for further elaboration or explanation. Table 6.4 shows excerpt examples.

Table 6.4 Interview − RQ1 Excerpts

The transcript responses imply that respondents in general have a common understanding of chairperson competences, even if the definitions of the term competences differ slightly (e.g. the classification of communication in the personality dimension in PI 23, Table 6.4). It became clear in the answers that the participants are either experts in the field (e.g. board advisor) or have extensive personal experience (e.g. chairperson).

Open coding identified a total of 138 in vivo codes, whereby the axial procedure led to 23 first-order competence concepts for the chair. Subsequently, selective coding, with the constant comparison method and the inclusion of prior theoretical knowledge about competences, raised the level of abstraction to 5 second-order competence concepts. A full overview is provided in Table 6.5, according to which the final dimensions included personal, social, leadership, business, and technical competences. When considering the output, there are six observations worth noting:

Overall, as the final qualitative dimensions are identical to the five dimensions of the theoretical model (Figure 4.3, Section 4.2.2), it confirms the theoretically established competence principles and their application to the chairperson. No missing factors nor outliers were identified that do not correspond to the existing concept. Despite confirming the underlying principles (the use of the wordings of the final dimensions is exactly the same as in the theory), the in vivo codes in particular allowed for an expansion of the existing categories with more detailed clarifications (keyword theory elaboration, Section 6.1.4).

Second, integrity and authenticity in particular drive perceptions of personal competence in a prominent way (PI 33, Table 6.4). This reflects the theory that less visible, deep-rooted personal competence traits are the foundation for the other four competence dimensions. As an example to illustrate the essence of personality, the interviewees often referred to the chair-CEO relationship (Section 6.3). In that constellation, the board chair should have no (ego) problem with withdrawing from the limelight in favour of the CEO (PI 27, Table 6.4). However, the interviewees were also aware of the fact that these soft factors are difficult to capture. They thus repeatedly stressed the importance of multi-person and face-to-face interviews to get to know the candidate thoroughly and to address both personal as well as professional topics.

Third, the aspect of social competence seemed less important (the same conclusion is reached by Krause et al., 2016, p. 1999). When asked what specific competences a chair needs, few of the interviewees mentioned keywords such as ‘networking’ or ‘verbal eloquence’. Finding a specific explanation for this is complex. However, the reason could be that participants took social competences for the efficient completion of subsequent activities for granted. Assuming this were the case, it would indirectly confirm the iceberg analogy (Section 4.1.1). This is exemplified by the excerpt from PI 23 (Table 6.4), which illustrated that communication is an integrator for a common goal (vision), suggesting that social skills are the prerequisite for leadership (and business) competences.

Fourth, participants consider the chair’s leadership important for building trust and respect towards the board/senior management and for leading and guiding the overall organisation (PI 7, Table 6.4). In this context, PI 11 (Table 6.4) referred to the notion of the “lazy chairman”. For the interviewees, the tone at the top, the processes, and the dialogue culture strongly influence board work. As the driving person who first implements the board structures accordingly, the board chair then retreats and acts as a sparring partner and coordinator, leaving the assigned work to the individual committees and their members. For discussion and decision-making in the full board, in the sense of a steward, the chairperson then returns to preside the meeting.

Fifth, as clearly highlighted (PI 24, Table 6.4), business competence is closely related to the role of the chair. Having knowledge of the board business, especially industry expertise and experience as CEO, board member, and/or chairperson, helps the chair to overcome the distance from the day-to-day business and to quickly build bridges to stakeholders. When it specifically comes to succession processing, however, participants tend to see it as a necessary “entry ticket” (PI 11, Table 6.4). Afterwards, personal and social competences become all the more important.

Lastly, the findings on technical competence are in accordance with the theory. Interview participants referred to technical competence as the least important of all competence dimensions. The excerpt from PI 19 (Table 6.4) perfectly exemplifies the dyadic relationship gap that the personal and technical competence dimensions have with each other. The fact that there is a wide range of technical competences also illustrates that the competence requirements for a chairperson are broader compared to those of an ordinary board member. Having knowledge across a wide range of dimensions allows for effectively challenging the board and senior management.

Table 6.5 Interview − RQ1 Overview of Codes and Concepts

6.5 RQ2 Results

RQ2 (input-process-output) provided in-depth insights into the moderators that drive chairperson succession processing. Interview participants were asked to reflect on current succession practices: what they consider to be an ideal succession process, where there is a need for more accuracy and development in succession planning, and whether and to what extent they integrate stakeholders into the process. In that sense, the questions targeted factors to consider (related to best practice) and factors to address (related to expectation management). Table 6.6 shows excerpt examples.

Table 6.6 Interview − RQ2 Excerpts

On the one side, due to the open question format, the excerpts in Table 6.6 exemplify how multifaceted and broad the answers of the respondents were. It illustrates the multidimensionality of the succession process (Elms et al., 2015, p. 1321). On the other side, the response examples emphasise the strong link to theory. The theoretical link exists because the interview participants referred to moderators that fit the elaborated theoretical constructs (Figure 4.4, Section 4.3.1).

Open coding produced 137 in vivo codes. Axial coding then subsumed these into 31 first-order concepts. Selective coding, with its constant comparison method as the third step, raised the level of abstraction to 5 second-order process concepts related to chairperson succession processing. An overview of the relationship between the three coding procedures for RQ2 is provided in Table 6.7. Following the theory (Sections 4.3.2 and 4.3.3), the final dimensions identified for the first stream were business contingencies, environmental contingencies, governance contingencies, political contingencies, and stakeholders. In order to correctly embed the absolute results mentioned above, five points should be considered:

First, “one size does not fit all” (PI 5, Table 6.6). Process alignment with respect to business characteristics depends on how the organisation intended to address it (PI 18 and PI 33, Table 6.6). For example, it was found that ownership seems to have a major influence on succession processing. According to the participants, organisations with family and institutional ownership approached the process differently. Family-run organisations were more active in involving the respective shareholders to describe the procedure or clarify expectations early on (PI 19, Table 6.6). By contrast, institutional block holders were less actively approached. Mostly, the investor days/roadshows held once a year were suitable events to address succession topics. According to the interviewees’ descriptions, however, discussions were not as in-depth as in organisations owned by individuals or families. With respect to board structure, the interviews revealed that the process approach was particularly based on historical nomination procedures, board dynamics, and board culture (PI 32, Table 6.6). Other business indicators impacting the process relate to the life cycle (time and performance pressures). Depending on the scope, the specific contingencies have less or greater effect on process planning.

Second, with regard to environmental characteristics, participants regularly referred to proxy activism and regulation/regulatory influences. For proxy activism, in line with theoretical considerations (Section 4.3.3.2), interviewees especially criticised the proxy advisors’ tick-the-box approach. As there is often a lack of context in the reports of proxy advisors, the tick-the-box scheme particularly requires active participation by the organisations in order to circumvent (negative) influences on the election of the chairperson at the AGM. Regulatory concerns have similar effects, with sometimes strong industry influence (e.g. financial industry). Particularly with respect to legal bodies and specific mandatory articles, organisations are cautious about with whom they speak and how they involve the respective body (e.g. equal treatment of shareholders). In addition, the way the process is managed also depends on a variety of market factors, with particular attention paid to ‘geopolitical environment’, ‘market environment’, ‘political environment’, and ‘societal environment’ (see appendix A5 in the electronic supplementary material).

Third, with respect to governance, it was evident that participants were aware of the need to promote a systematic and transparent process (PI 4, Table 6.6). The process should be objectively managed and follow recognised best practice patterns (PI 22, Table 6.6). More importantly, confidentiality should be maintained (PI 7, Table 6.6). The strict(er) focus on systematics is certainly a consequence of regulation (Chapter 2) and increasing activism (Section 4.3.3.2). Had the same interview process been used 20 years ago, it would likely have resulted in a reverse evaluation format between governance and political contingencies (PI 10 and PI 26, Table 6.6). Specifically for the chair search, the three most frequently mentioned criteria related to ‘diversity, ‘overboarding’, and ‘independence’. Yet, with reference to ‘age’, ‘financials’, and ‘commitment’, the focus was also placed on less predeterminant variables (usually the primary emphasis is on ‘gender’, ‘independence in mind’, and ‘full-time role’).

Fourth, the political dimension shows that personal power dynamics influence chairperson succession. The excerpt from PI 19 (Table 6.6) underlines that power, network, and the will to exert influence can decisively steer the process—beyond best practice processing. To monitor the bypassing of the board and of muscle game attempts, it is key to have roles appropriately distributed (process owner) and to have strong personalities on the board besides the chairperson (board composition). In addition to the examples of ‘club of friends’ and ‘political games’, it is also important to keep in mind social dynamics such as ‘lame duck’ and’fame’ that can arise as consequences of certain activities.¹²

Finally, as briefly mentioned above, the process should be managed in such a way that it is accepted by stakeholders. It is therefore important to clarify their expectations at an early stage (PI 16, Table 6.6). However, participants only involve stakeholders in decisions in a way that is appropriate for the specific group and the timing/step in the process (PI 20 and PI 27, Table 6.6). On the issue of involvement, participants made a strong distinction between ‘essential’ and ‘non-essential’ stakeholders. Owners, for example, were treated differently than board advisors (PI 25, Table 6.6). In that sense, most interviewees agreed with the involvement of insiders rather than outsiders (board, company secretary, CEO vs. shareholder, board advisory). However, even when respondents agreed to stakeholder involvement, the board was more likely to be involved earlier than the CEO or the family anchor shareholder in terms of timing/process stage. The reasons for the reluctance/passivity to involve stakeholders are related to board confidentiality and regulatory duties (Chapter 2).

Table 6.7 Interview − RQ2 Overview of Codes and Concepts

6.6 RQ3 Results

To address RQ3 (input-process-output), interviewees were asked how they perceive the current quality of board succession disclosure, whether and where they would be willing to voluntarily extend the information, and which channel and time/timing would be the most appropriate for disclosing. Depending on their responses, follow-up questions were posed to explore the topic further. Table 6.8 shows example excerpts.

Table 6.8 Interview − RQ3 Excerpts

In principle, the excerpt examples validate the theoretical principles (Section 4.4.1). Overall, however, the responses of the interview participants indicated that voluntary disclosure in succession planning is a new phenomenon. In some cases, it was challenging to generate substantial insights on the topic, as the participants referred to stock exchange-related regulatory measures or had previously not dealt much with the topic personally so far.

The novelty of voluntary succession reporting was also reflected in the coding process. Open coding generated 184 in vivo codes. Axial coding resulted in 36 first-order concepts. Finally, the constant comparison method in selective coding led to 5 second-order concepts. A summary is provided in Table 6.9. Subsuming the final dimensions resulted in motive, scope and content, channel, form, and time/timing. To understand the insights from the 40 interview participants, three points are worth emphasising:

First, subject to motives, interview participants were rather sceptical about extending the disclosure level. From the perspective of economic governance, some participants expressed concerns about introducing another formalistic approach (PI 16, Table 6.8). Especially chairpersons and company secretaries did not see the added value (PI 25, Table 6.8). For them, the critical discussion takes place on the board, to which the public will never have access to (PI 12, Table 6.8). From a social governance perspective, nevertheless, they reckon that shareholders and stakeholders demand more information (PI 32, Table 6.8). To meet this public demand, they thus strive to go beyond the minimum requirements when reporting on succession. Regardless of the perspective, however, two things were prominent when the respondents referred to voluntary disclosure in succession. First, disclosure content that would enable third parties to subsequently take legal action should be avoided. An example mentioned several times was the subject of the competence matrix (PI 20, Table 6.8). Competence needs could change in the future and may thus represent a potential litigation risk for the matrixes used in the past. Second, organisations intentionally refrained from disclosing certain information (PI 23, Table 6.8). For them, some information was confidential, competitively sensitive, and/or could be misinterpreted in the market (PI 32, Table 6.8).

Secondly, at the scope and content level, it is acknowledged that there is currently insufficient disclosure at board level. The tenor was that it is not enough to just provide a CV (PI 34, Table 6.8). On a person-related level, shareholders are owed an explanation as to why the proposed candidate is suitable in view of the strategy and the role the person is expected to assume on the board (PI 27, Table 6.8). For some interviewees, this included structural level insights into the process that led to the proposal of the candidate (PI 3, Table 6.8). Especially in the case of public organisations, shareholders are entitled to and board members are open to greater transparency (PI 15, Table 6.8), even if shareholder and stakeholder demand was (too) low in some cases (PI 34, Table 6.8). It is then up to the organisations to respond actively.

Third, the majority of participants considered the annual report and press release (channel), CV (form), and ad hoc publication (time/timing) to be the appropriate methods of disclosure. The choice of already established variables is no coincidence, as interviewees strongly opposed alternative forms (e.g. social media). They believe that the use of modern technologies will not drastically improve the quality of disclosure (PI 27, Table 6.8).

Table 6.9 Interview − RQ3 Overview of Codes and Concepts

6.7 Limitations

The collection of interview data offers advantages, but it also has its limitations. Owing to methodology, the most important disadvantage of interview processing is the withholding of internal information and/or the omission of critical statements, especially in the case of sensitive questions (Thomas, 2003, p. 66). This has to do with the fact that theresearcher conducting the interview cannot guarantee complete anonymity.¹³ Thus, interview parti-cipants sometimes refrained from giving detailed explanations because they were not willing to disclose internal processes to outsiders. In addition, the data collected from the organisations’ representatives refer to a single point in time. As board chair succession is a dynamic issue, people only serve on boards for a certain period of time, and best practice guidelines are constantly adapting, the implications provided should be applied to the relevant point in time and should not be interpreted backwards/forwards (Pye & Pettigrew, 2005, p. 32).

Conceptually, the knowledge for an in-depth discussion on the topic of chairperson succession differed considerably. For some interview participants, certain topics were already established and/or discussed internally. If this was the case, participants were able to contribute valuable insights for this thesis. For other interviewees, some topics were new and the insights were rather limited. This can be observed particularly in RQ3 (Section 6.6). Interview participants sometimes found it difficult to understand the topic thoroughly and to reflect on views that go beyond the necessary statutory disclosure principles. As the interviews were conducted in English, the situation was further complicated by the language barriers that sometimes arose (Bell et al., 2019, p. 458). In addition, the interview participants were predominantly from capital-intensive, traditionally oriented SPI organisations with little focus on innovation and growth (Section 6.2.2). The willingness to change and to adapt processes to new, modern situations was therefore rather low. Perhaps, interviewing organisations known for their innovative strength and less rigid process structure would have yielded different results.

Theoretically, it is challenging to properly capture a person’s qualitative soft criteria. Corresponding to the iceberg analogy (Section 4.1.1), soft criteria are difficult to identify and to analyse in a well-founded manner. This was also evident in the interview results − also beyond the competence dimension of RQ1. The reason was, on the one hand, because participants perceived certain characteristics differently, which resulted in follow-up questions and/or intensive analysis to subsequently interpret the statements correctly. On the other hand, it takes in-depth knowledge to identify a candidate’s soft factors in the succession process. One interviewee thereby highlighted the fact that candidate selection is simultaneously “highly quantitative” and “highly irrational”, whereby it is “the irrational that is influencing the development of the individual in a chairman’s role” (PI 12). In this sense, time and role perception may change the personality, as overall, the persons with high social status “tend to be most difficult to ingratiate successfully” (Westphal & Shani, 2016, p. 479). This also makes the right choice more difficult and explains why organisations focus more on communicating quantitative rather than qualitative criteria to the outside world.

Lastly, the coding process was performed in such a way that the qualitative results were reliable and valid (Section 6.1.3). In line with the theory of elaboration design (Section 6.1.4), previous theoretical constructs were integrated, but without implying any subjective research bias on the part of the scholar conducting the research. Despite the strong focus on adequate qualitative application, a potential research bias may still occur.

6.8 Review

The qualitative interview findings have shown that chair succession is a complex, interlocking theme that needs to be addressed appropriately. The coded interview transcripts made it possible to expand on existing theory and to establish links within certain thematic blocks that serve as a basis for further analysis. This also revealed that there is a discrepancy between research and practice and that theory thus does not fully correspond to day-to-day methods. To meet the underlying research questions, it is therefore important to connect the two worlds of theory and practice in the analytical interpretation. In view of the interview findings, the following can be noted:

• The introductory results have shown that the presence/absence of trigger points influences the chairperson succession cycle. They can be described as planning and turning points in the process. The variables related to this are process parameters, people parameters, origin, and catalysts.

• For competences (RQ1), personal, social, leadership, business, and technical competences are associated with multidimensional role attributes. To adequatly capture them, it is necessary to relate them to the context and the people/ relationships involved.

• For moderators (RQ2), the business, environmental, governance, and political contingencies have shown that there is not just one single process. Depending on their characteristics, they can distort the process differently. In terms of stakeholders, there is a strong distinction betweeeen ‘essential’ and ‘non-essential’, which affects the strength and timing of integration.

• Voluntary disclosure (RQ3) was mentioned least by interview participants. Interviewees most often referred to motive, scope and content, channel, and time/timing when talking about external communication about succession. To strengthen disclosure, it is believed that these points should be addressed first to create greater awareness.