Do CFO transitions increase stock return volatility? The moderating role of CEO-CFO alignment and gender diversity within the executive dyad

KOZOL E.

SOUTH AFRICAN JOURNAL OF ACCOUNTING RESEARCH, 2026 (ESCI)

Özet

Purpose To examine whether Chief Financial Officer (CFO) turnover increases firm-level risk, measured by post-turnover stock return volatility.Aim To investigate whether the relationship between CFO turnover and post-turnover stock return volatility is moderated by CEO-CFO alignment and gender diversity within the executive dyad.Design/Methodology/Approach Drawing on upper echelons theory and behavioural corporate finance, this study employs firm-fixed effects regressions using a panel of 986 U.S. firm-year observations covering the period 1992-2024.Main findings The results indicate that CFO turnover significantly increases post-turnover stock return volatility. This effect is amplified when the CEO and CFO are appointed within the same fiscal year (CEO-CFO alignment, reflecting synchronised executive formation) and when the CEO and CFO are of different genders (gender diversity within the CEO-CFO dyad).Practical implications The findings highlight the importance of executive dyad composition in shaping market-perceived risk and suggest that boards, investors, and other stakeholders should consider CEO-CFO alignment and gender diversity when evaluating the implications of CFO succession.Novelty/Contribution This study provides novel evidence that executive dyad composition moderates the stock return volatility implications of CFO turnover, extending upper echelons theory by demonstrating how leadership dynamics influence market-perceived risk.