A family member or professional management? the choice of a CEO and its impact on performance

Shu Hui Lin, Shing Yang Hu

Research output: Contribution to journalArticle

66 Citations (Scopus)

Abstract

In this study, we explore what kinds of family firms are more likely to have a family CEO or professional CEO, and investigate the performance of CEOs from different backgrounds. The results show that firms with low requirements in managerial skills and a high potential for expropriation are more likely to choose a CEO from the controlling family (nepotism). Our investigation, furthermore, shows that when a firm requires high managerial skills, using a professional CEO can help firm performance, especially if the family has low cash-flow rights and weak control. When there is large opportunity for expropriation in a family firm, the firm's performance will be better if the CEO is a family member and the family has highly persuasive cash-flow rights.

Original languageEnglish
Pages (from-to)1348-1362
Number of pages15
JournalCorporate Governance: An International Review
Volume15
Issue number6
DOIs
Publication statusPublished - 2007 Nov

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)
  • Strategy and Management
  • Management of Technology and Innovation

Fingerprint Dive into the research topics of 'A family member or professional management? the choice of a CEO and its impact on performance'. Together they form a unique fingerprint.

  • Cite this