Firm Performance and Managerial Succession in Family Managed Firms
University of Strathclyde, Glasgow - Department of Accounting and Finance
University of Strathclyde
Journal of Business Finance & Accounting, Vol. 36, Issue 3-4, pp. 461-484, April/May 2009
This paper investigates whether the family status of a company's top officer affects managerial replacement decisions. We report evidence that family-managed companies are characterized by higher levels of board control and potentially weak internal governance systems. Family CEOs are less likely than non-family CEOs to depart their position following poor performance. Stock prices react favorably and operating performance improves when companies announce the departure of a family CEO. Overall, our evidence suggests that shareholders benefit when a powerful CEO leaves their position in the company.
Number of Pages in PDF File: 24Accepted Paper Series
Date posted: May 12, 2009
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