A new study finds no correlation between how a company's stock fares upon the announcement of a new CEO and the share price over that CEO's tenure. In fact, under certain circumstances, CEOs whose appointments cause their company's stock to drop tend to achieve better results over time than CEOs whose appointments cause the stock to rise. Directors looking to choose a new CEO should think about other criteria, such as the company's recent performance and whether candidates are insiders or outsiders.

For too long, boards have relied on rules of thumb and conventional wisdom when picking CEOs. New research offers some surprising insights that will better guide succession strategy.

John Dooley, BioSol's vice-president of strategic research, has been making a name for himself at the biotechnology company's offices in Ireland. He's been doing so well, in fact, that the firm has offered him a promotion to director of strategy at headquarters--in California. He's lived abroad before. In the 1980s, making a living in Ireland was tough: Jobs were scarce and unemployment was high. So John and his wife, Fiona, moved to Massachusetts, where John attended MIT. They were not alone; many of their friends and family members also moved out of Ireland then. John and Fiona enjoyed their time in Boston; they became active in a large expatriate community and established reputations in their professional fields. By 1999, however, the Celtic Tiger was running at full speed. The Irish economy was booming and the whole country seemed to be bursting with possibility. When John was offered a job at BioSol's Dublin subsidiary, he and Fiona moved home and never looked back--until now. The new promotion would give his career a huge boost, but accepting it would mean uprooting his family and becoming an expat again. Ireland's economy is going strong now, but what if it doesn't last? Should John cast his lot with his country or his company? Commenting on this fictional case study in R0511A and R0511Z are Raj Kondur, the CEO of Nirvana Business Solutions in Bangalore, India; James Citrin, a senior director at Spencer Stuart in Stamford, Connecticut; Maurice Treacy, the director of biotechnology at Science Foundation Ireland in Dublin; Arno Haslberger, who teaches HR management at Webster University Vienna in Austria; and Sharman Esarey, also in Vienna, editor of the annual report of the Organization for Security and Co-Operation in Europe.

John Dooley, BioSol's vice-president of strategic research, has been making a name for himself at the biotechnology company's offices in Ireland. He's been doing so well, in fact, that the firm has offered him a promotion to director of strategy at headquarters--in California. He's lived abroad before. In the 1980s, making a living in Ireland was tough: Jobs were scarce and unemployment was high. So John and his wife, Fiona, moved to Massachusetts, where John attended MIT. They were not alone; many of their friends and family members also moved out of Ireland then. John and Fiona enjoyed their time in Boston; they became active in a large expatriate community and established reputations in their professional fields. By 1999, however, the Celtic Tiger was running at full speed. The Irish economy was booming and the whole country seemed to be bursting with possibility. When John was offered a job at BioSol's Dublin subsidiary, he and Fiona moved home and never looked back--until now. The new promotion would give his career a huge boost, but accepting it would mean uprooting his family and becoming an expat again. Ireland's economy is going strong now, but what if it doesn't last? Should John cast his lot with his country or his company? Commenting on this fictional case study in R0511A and R0511Z are Raj Kondur, the CEO of Nirvana Business Solutions in Bangalore, India; James Citrin, a senior director at Spencer Stuart in Stamford, Connecticut; Maurice Treacy, the director of biotechnology at Science Foundation Ireland in Dublin; Arno Haslberger, who teaches HR management at Webster University Vienna in Austria; and Sharman Esarey, also in Vienna, editor of the annual report of the Organization for Security and Co-Operation in Europe.