Building on the resource dependence theory, this study provides a novel perspective of interceding CEO succession to understand substantive role of the CEO succession in managing firms’ relationship with the state. We argue that when firms intend to deviate from the state expectations and maintain a practice contested by the state, firms are likely to hire a CEO with state connections to serve as a mediator on the firm’s behalf to facilitate the resource flows between the firm and the state in order to avoid potential sanctions from the state. The effect of the interceding CEO succession may vary depending on the power relationship between the state and the firms. We further argue that interceding CEO succession is substantive as indicated by the increased resource flows to the state after a CEO with state connections is hired. Analyses of CEO succession events for publically listed enterprises in China in the context of dividend policy reform in 2008 support our arguments. Firms deviating from the state expectations on dividend payments tend to hire new CEOs with state connections. This tendency becomes stronger when firms have a higher state ownership, in period when the government masters a higher amount of resources and in regions with less developed marketization. We further demonstrate that firms after hiring a CEO with state connections tend to make more public donations expected by the state. Our study not only brings new insights into the role of CEO succession in managing relationships with powerful stakeholders but also makes contributions to literature of resource dependence theory in terms of managing environmental contingencies.