A new study from the University of East London has found that companies led by long-serving chief executives may become less innovative over time unless challenged by strong independent boards.
The research examined 215 FTSE 350 companies over an 11-year period between 2010 and 2021. It explored how CEO tenure and independent directors influence a company’s “R&D knowledge stock”, which is the research, expertise and technological capability built through investment in innovation.
The study published in the journal Corporate Governance found that CEOs who remain in office for many years often become more cautious and less willing to back risky research and development projects. These companies were more likely to reduce investment in innovation and long-term technological growth.
Firms with higher numbers of independent directors were more likely to continue building innovation capacity with experienced CEOs and independent directors forming an effective partnership, to combine deep company knowledge with outside challenge.
However, both experienced CEOs and independent directors become more cautious and less willing to back risky research and development projects when the company fails to meet performance aspirations, suggesting that independent directors do not have stable risk preferences.
The findings suggest that innovation is shaped not only by technology and finance, but also by leadership culture and corporate governance structures.
Author Dr Igbekele Sunday Osinubi , of the Royal Docks School of Business and Law , said:
“Long-serving CEOs can bring valuable experience and stability, but there is also a risk that leaders become too cautious or too attached to existing ways of thinking. Our findings show that independent directors play an important role in encouraging companies to continue investing in innovation, especially during difficult periods when firms may otherwise retreat from long-term research and development.”
He added:
“This matters beyond individual companies. Innovation drives productivity, competitiveness and economic growth. The study highlights how governance structures can influence whether firms continue building the knowledge and technologies that shape future industries.”
The paper argues that regulators and policymakers should consider governance reforms and incentives that encourage long-term innovation strategies, particularly in firms led by long-serving executives. The findings may also influence how boards think about CEO succession planning, oversight and the balance between short-term financial pressures and long-term investment.
Osinubi, IS (2026) “ Long CEO tenure, independent directors and R&D knowledge stock: the moderating effect of performance shortfalls ”, Corporate Governance: The International Journal of Business in Society . DOI: 10.1108/CG-03-2025-0173.
Corporate Governance
Data/statistical analysis
Long CEO tenure, independent directors and R&D knowledge stock: the moderating effect of performance shortfalls
28-Apr-2026