When companies plan to restructure, it makes a difference if the new CEO is hired from inside or outside. Pexels

Star Co. is a hot mess. The business is bloated and sprawling. Its stock is tanking. Profits are down. It's clearly time for a new CEO.

But where to look — inside the company or outside? It's a decision every restructuring company faces.

Cenovus Energy tapped an outsider in 2017. General Electric, the same year, went with a longtime insider. Though it's too soon to know yet for sure, which one likely made the right choice?

Rice Business emeritus professor Robert E. Hoskisson, with coauthors Shih-chi Chiu, then at Nanyang Technological University (now at the University of Houston), Richard A. Johnson of University of Missouri, Columbia and Seemantini Pathak of University of Missouri-St. Louis, set out for an answer: Where is the best place for a restructuring company to get its next CEO?

According to conventional wisdom and some past research, change is more likely under an outside CEO. He or she can start fresh, armed with a greater mandate to shake things up.

Recent evidence, though, suggests that outsiders may actually have more trouble succeeding. That's because they lack the institutional knowledge to make the most informed choices, and the existing relationships needed to ease change with minimal pain. Insiders, this research shows, have the advantage of key "firm-specific" knowledge on everything from customers to suppliers to workforce composition.

To pin down an answer on whether it's better to stay inside or go outside, Hoskisson's team decided to look at corporate divestiture — asset sales, spinoffs, equity carve-outs — as a proxy for overall strategic change. (It's already well documented that a new CEO makes organizational changes such as personnel changes and culture shifts.)

Next, they distinguished between scale and scope. The scale of a divestiture reflects magnitude: How many units were sold? The scope reflects diversification portfolio adjustment: Does the company have fewer business lines?

Focusing on 234 divestitures at U.S. firms that voluntarily restructured between 1986 and 2009, the authors defined a new inside CEO as having been in that role two or fewer years, and with the company previously for more than two years. They defined a new outside CEO as someone who had been at the company for a maximum of two years in any role.

Heading into the analysis, the researchers expected they would reach different conclusions for scale vs. scope. And the results were just that.

New inside CEOs, they found, did carry out more divesture activities than new outside CEOs. Not having as much inside knowledge, the outside CEO was more likely to prefer a simpler divesture plan, one that didn't require evaluating each unit or asset. Instead, the professors hypothesized, an outsider was more likely to follow investors' general preferences about firm strategy.

"When a higher magnitude of corporate divestures is required, internal successors are more astute than external successors in accomplishing this objective," the researchers write. On the other hand, when a company wants to shrink the diversified scope of a business portfolio, "external successors are more likely to bring their firms to a more focused position."

The researchers also suggested future lines of study about new CEOs and strategic change. What happens when firms want to buy and sell at the same time? Does the CEO selection process itself affect restructuring scale and scope? And does an inside chief executive who won a power struggle against a predecessor perform differently than an inside CEO named in orderly succession planning?

In the meantime, the findings are clear. If your corporate board is hunting for a new CEO, it may pay to go for the fresh face. But depending on your goals, your best option may also be a top executive sitting at a desk a few steps away.

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This story originally ran on Rice Business Wisdom.

Robert E. Hoskisson is the George R. Brown Emeritus Professor of Management at Jones Graduate School of Business at Rice University.

Does your brain have the right components to be an entrepreneur? Getty Images

Rice University research finds certain cognitive factors appear in the minds of entrepreneurs

Houston Voices

The entrepreneur strides into a room of potential backers. Swathed in understated grey, she walks with assurance and chats in the cool, easy-going cadences of the leaders she plans to woo. But will an approach like this really affect the fate of her startup? And if not, what will?

A literature review by Rice Business professor Robert E. Hoskisson and colleagues Jeffry Covin of Indiana University, Henk W. Volberda of Erasmus University and Richard A. Johnson of Arnold & Porter offers clues to a vast range of questions about the entrepreneurs' trade. It also outlines where research still falls short. What, for example, most influences a startup founder's success? Is entrepreneurial triumph driven by innate ability or acquired skill? What's the role of factors such as regulatory structures or an entrepreneur's own work environment?

Traditional research, Hoskisson and his associates note, makes it clear that certain cognitive factors really do differentiate people who start new ventures from their more staid counterparts. And recent scholarship has traced how individual entrepreneurs decide to launch their startups and how they spot entrepreneurial opportunities. Still unclear, though, is whether entrepreneurs think differently overall, possess innate qualities that lend themselves to entrepreneurship or somehow become catalyzed by the entrepreneurial role itself.

More research could help answer those questions. Research is also needed to pinpoint exactly how the best entrepreneurs express their plans in order to sound legitimate enough to earn funding and support, Hoskisson's group says. What the scholarship does show is that that the grey-clad entrepreneur with the easygoing patter knows what she's doing: symbolic language, gestures and visual symbols all help create professional identity, emphasize control and regulate the emotions of a viewer. Setting, props, style of dress and expressiveness all count, and the more experienced the entrepreneur the more props she uses.

At the same time, no unified model fully explains how successful entrepreneurs gain their funding. Models range from the hyper-rational analysis offered by game theory to a stimulus-response model in which people react as if they're marionettes. Other mysteries include how the entrepreneurship impulse arises, how it shapes innovation and competitive advantage and how it is translated in individual actions and interactions. More research in these areas, says Hoskisson, would help not only entrepreneurs in the eternal quest for funding, but also the understanding of how to nurture human potential.

Examining institutional differences among countries and how that affects entrepreneurship is also ripe for study. So far, entrepreneurship research has focused on individual attributes. But there's a need, Hoskisson and his colleagues say, for scholars to connect the dots between startup success and political environments, rule of law, regulation and entrepreneurship.

The same goes for work on diverse contexts in emerging economies. In transition economies, China being one example, networks create political and social capital that allows special access and legitimacy. On the other hand, in those same countries ponderous bureaucracies and basic resource limitations can hamper entrepreneurial projects. Detailed understanding of such cultures will only get more urgent as ventures in emerging economies increase and companies that are "born global" proliferate.

Also on the research to-do list about entrepreneurs: the chances of securing funding in given emerging economies and the power — or frailty — of their intellectual property laws. Regulation, especially, plays a pivotal role in these countries, Hoskisson writes. The lighter the regulation, the more entrepreneurship flourishes, according to one study of 54 countries. On the other hand, countries blessed with a strong rule of law offer entrepreneurs more opportunities for strategic entry.

Understanding the entrepreneurial mind, and its interaction with the material world, isn't simple. Consider the late Texas billionaire H. Ross Perot's plan to send gifts to all POWs in Vietnam during the height of the Vietnam War. Unsurprisingly, the Vietnamese government announced that a gift delivery was impossible while Americans were bombing the country. Undeterred, Perot offered to rebuild anything the Americans had bombed. Rebuffed again, Perot chartered a plane to Moscow, instructing aides to deposit the Christmas presents, one by one, at Moscow post offices, addressed to Hanoi.

Amusing as it can be to hear about such entrepreneurial gumption, it may be even more useful to study entrepreneurship systematically. Not everyone can have an entrepreneur's brain, Hoskisson's review of research suggests, but good scholarship might be able to teach people how to walk the walk.

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This story originally ran on Rice Business Wisdom.

Robert E. Hoskisson is the George R. Brown Emeritus Professor of Management at Jones Graduate School of Business at Rice University.

Family firms aren't investing in research and development — but why? Getty Images

Rice University research sheds light on what family office investors are looking for

Houston Voices

Family firms are publicly traded companies in which family members own at least 20 percent of the voting stock, and at least two board members belong to the family. For obvious reasons, the central principals in these firms tend to have a longer view than principals in non-family firms. Yet family firms invest less in research and development (R&D) in technology firms than their non-family counterparts. Since investments in R&D are stakes in the future, why this disparity?

Robert E. Hoskisson, a management professor at Rice Business, joined several colleagues to answer this question. Refining a sociological theory called the behavioral agency model (BAM), the researchers defined family-firm decisions as "mixed gambles" — that is, decisions that could result in either gains or losses.

Because success in high technology relies so much on innovation, it's especially puzzling when such a family owned business underinvests in R&D. So Hoskisson and his colleagues focused on the paradox of family firms in high tech.

According to previous research, family owners weigh both economic and non-economic factors when making business decisions. Hoskisson and his team labeled these non-economic factors socioemotional wealth (SEW). SEW can include family prestige through identifying with and controlling a business, emotional attachment to the firm or the legacy of a multigenerational link to the firm.

That intangible wealth (SEW) explained some of the families' R&D choices. While investment in R&D may lower future financial risk, it can threaten other resources the family holds dear. Expanded R&D spending, for instance, is linked with competitiveness. At the same time, it is associated with less family control. That's because to invest more in R&D, businesses typically need more external capital and expertise. So when a family firm underinvests in R&D, it may in fact be protecting its socioemotional wealth.

To further understand these dynamics, the researchers looked at three factors that they expected would raise families' R&D spending to levels more like non-family counterparts.

The first factor was corporate governance. As predicted, the researchers found that family firms with a higher percentage of institutional investors invested in R&D at levels more like those of non-family firms. The institutional investors naturally prioritized economic benefits far more than the founding family's legacy wealth (SEW).

The researchers also analyzed corporate strategy. Family firms, they found, invested more in R&D when it might be applied to related products or markets. Even families bent on preserving non-economic wealth could be lured by a big economic payoff, and related business are easier to control because they are closer to the family legacy business expertise.

Finally, Hoskisson and his colleagues looked at performance. When a family firm's performance lagged behind that of competitors, they reasoned, the owners would spend more on R&D. A higher percentage of institutional investors, the team theorized, would magnify this effect. Interestingly, the primary data (from 2004 to 2009) failed to support this hypothesis, while an alternative data set (from 1994 to 2002) confirmed it.

Further research, the investigators wrote, could shed useful light on this puzzle. They also encouraged study of how family firms conduct mergers and acquisitions. After all, while families can seem inscrutable from the outside, most run on some kind of economic system. The currency just includes more than money.

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This story originally ran on Rice Business Wisdom.

Robert E. Hoskisson is the George R. Brown Emeritus Professor of Management at Jones Graduate School of Business at Rice University.

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Houston brain health co. secures $6.5M for rare disease study

neuro funding

Houston-based Goldenrod Therapeutics, part of Fannin Partners' portfolio, has announced the initial close of a $6.5 million series seed preferred stock round.

The round was led by Ataxia Ventures and an affiliate of Fannin, according to a news release.

Goldenrod Therapeutics plans to use the funding to support manufacturing, formulation optimization, IND-enabling studies and a Phase I study of its drug to treat brain inflammation, known as 11h.

The study will consider how 11h, which blocks the enzyme PDE4, could treat Friedreich’s ataxia (FA), a rare genetic disease that affects movement, speech and balance. To date, other PDE4 inhibitors have proven to regulate neuroinflammation and neuronal signaling, but have had adverse gastrointestinal side effects or have not reached enough of the central nervous system, according to Goldenrod.

The company says its 11h is expected to have "broad applicability" with limited emetric side effects.

“Our 11h program is a next-generation, orally bioavailable, brain-penetrant PDE4 inhibitor, where researchers overcame longstanding limitations associated with earlier PDE4 inhibitors," Dr. Dev Chatterjee, CEO of Goldenrod, said in the news release. "We believe this creates the potential for a best-in-class therapy for Friedreich’s Ataxia and a potential foundation for development across multiple neurodegenerative and neuroinflammatory disorders.”

11h was first developed at the University of Nebraska Medical Center (UNeMed). Houston-based Fannin Partners in-licensed the product 2020 and landed SBIR Phase I funding to support its initial development for opioid use disorder soon after.

Goldenrod has also received funding to study 11h's effectiveness for multiple sclerosis, methamphetamine addiction and cocaine addiction.

Goldenrod says it is developing 11h to target a variety of neurological and inflammatory conditions, including Alzheimer's disease, multiple sclerosis, ALS, substance use disorders, Batten disease, pain and traumatic brain injury.

27 Houston companies make Fortune 500 for 2026, led by energy giants

Houston HQs

Editor's note: This article has been updated to correct the number of companies based in the Dallas-Fort Worth area.

Houston is a giant among U.S. hubs for corporate headquarters.

The 2026 Fortune 500 lists 27 companies based in the Houston area, with many energy companies claiming top spots. Houston ties with Chicago for the second-most Fortune 500 headquarters, preceded only by New York City (53). Dallas-Fort Worth is home to 24 Fortune 500 headquarters.

Texas leads the nation for Fortune 500 headquarters (57), with California in the No. 2 spot and New York at No. 3.

“Texas is the undisputed headquarters of headquarters,” Gov. Greg Abbott said in a news release. “The world’s leading businesses invest with confidence in Texas because of our welcoming business climate, predictable regulatory environment, and skilled and growing workforce. People and businesses are choosing Texas because Texas works.”

The 2026 Fortune 500 ranks the largest U.S. corporations based on revenue in fiscal year 2025.

Here’s a rundown of the 27 Fortune 500 companies based in the Houston area.

  • No. 9 ExxonMobil
  • No. 21 Chevron
  • No. 29 Phillips 66
  • No.55 Sysco
  • No. 75 ConocoPhillips
  • No. 89 Enterprise Products Partners
  • No. 103 Plains GP Holdings
  • No. 133 Hewlett Packard Enterprise
  • No. 149 NRG Energy
  • No. 157 Quanta Services
  • No. 164 Baker Hughes
  • No. 173 Occidental Petroleum
  • No. 179 Waste Management
  • No. 201 EOG Resources
  • No. 204 Group 1 Automotive
  • No. 207 Halliburton
  • No. 223 Cheniere Energy
  • No. 236 Corebridge Financial
  • No. 262 Targa Resources
  • No. 266 Kinder Morgan
  • No. 388 Westlake
  • No. 435 CenterPoint Energy
  • No. 438 APA
  • No. 440 Comfort Systems USA
  • No. 455 NOV
  • No. 488 KBR
  • No. 496 Coterra Energy. Oklahoma City, Oklahoma-based Devon Energy and Houston-based Coterra Energy merged in early May, with the combined company retaining the Devon Energy name and the Houston headquarters.

The Greater Houston Partnership notes the Houston area soon will welcome its 28th Fortune 500 company. Expand Energy (formerly Chesapeake Energy), appearing at No. 362 on the 2026 list, says it’s moving its headquarters from Oklahoma City to Spring this year.

As the natural gas producer prepares to relocate to Texas, it’s hunting for a new leader. Nick Dell’Osso stepped down as president and CEO earlier this year. Board Chairman Michael Wichterich is interim president and CEO.

Dell’Osso became president and CEO of Oklahoma City-based Gulfport Energy effective May 28.

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This article first appeared on EnergyCapitalHTX.com.