The role of CEO succession in promoting sustainable business performance

A well-structured dividend policy is essential for sustainable corporate growth, investor confidence, and long-term business performance. In emerging markets such as China, where investor protection mechanisms remain relatively weak, dividends serve not only as a means of distributing profits but also as an important governance mechanism that mitigates agency conflicts, reduces information asymmetry, and signals commitment to shareholder value. The effectiveness of dividend policy, however, is closely linked to the strategic decisions and leadership quality of top executives, particularly during periods of CEO transition. This study examines the impact of CEO succession on corporate dividend payment decisions among publicly listed Chinese firms from 2010 to 2023. It further investigates whether CEO characteristics, specifically origin (insider versus outsider), age, and gender, moderate this relationship. Using fixed-effects regression analysis on panel data, the results indicate that CEO succession is positively associated with dividend payments. The positive effect is stronger when the successor is an outsider or a female CEO, while it weakens when the successor is older. The study contributes to the corporate governance and dividend policy literature by demonstrating how leadership transitions and executive attributes influence financial decisions that support sustainable business performance. By integrating insights from corporate governance, leadership succession, and financial strategy, the findings highlight the role of internal organizational mechanisms in advancing the United Nations Sustainable Development Goals, particularly SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), and SDG 5 (Gender Equality).