Succession Planning and Firm Profitability: Evidence from Listed Stock Broking Firms in Lagos State, Nigeria

Abstract

The Stock brokerage firms (SBFs) play an important role in the economic development of a nation. Extant literature revealed that succession planning determines firm profitability. Studies on Stock brokerage firms show that succession planning is not widely used by SBFs. Succession planning among SBFs cater only for CEOs and other top functionaries of the organisation and are not fully deployed to cover all cadres of employees. However, there is paucity of empirical literature on succession planning and profitability of SBFs in Nigeria. Succession planning implementation has been very poor and firm productivity has been found to be low as well. The study examines the effect of succession planning dimensions on profitability of listed stock broking firms in Lagos State, Nigeria. Using cross-sectional survey research design, copies of a structured questionnaire was administered to 670 senior staff of the 94 selected stock broking firms operating in Lagos State, Nigeria. The findings revealed that succession planning had significant effect on the profitability of listed SBF in Lagos State, Nigeria (Adj. R² = 0.537; F (5,492) = 116.135, p<0.05). Based on the findings, the study recommended that listed stock broking firms management should implement sound and global standard succession planning policies and processes that provide a work environment that meets the core management staff's needs to enhance overall firm performance.