When Does it Pay to Have a Chief Digital Officer?

We examine the circumstances in which having a Chief Digital Officer (CDO) increase firm performance. Drawing on upper echelons theory we argue that the effect of having a CDO on firm performance will vary with the attention that the firm’s Chief Executive Officer (CEO) and its board of directors (BOD) give to digital transformation. We suggest that both CEO’s and the BOD’s attention to digitalization influences the performance effect of having a CDO, because it (1) improves the CDO’s ability to drive and coordinate the digital transformation, and (2) it reduces the potential obstacles that the CDO confronts when digitally transforming the organization. We test our hypotheses using a newly created dataset containing information on 535 S&P 500 firms over the period 2010-2019. Our empirical support for the proposed contingent performance effect of having a CDO has implications for both practice and research.