Does the CFO Matter in Family Firms? Evidence from Italy

66 Pages Posted: 20 Sep 2007 Last revised: 27 Mar 2011

See all articles by Alberta Di Giuli

Alberta Di Giuli


Stefano Caselli

Bocconi University - Department of Finance

Date Written: June 1, 2008


Using data from 708 small and medium Italian firms during the period of 2002-2004, we find that in family firms a nonfamily CFO drives firm performance in a positive direction. Family firms with a nonfamily CFO perform better than both family firms with a family CFO and nonfamily firms. The best performance is achieved when the CEO is a family member and the CFO is an outsider (nonfamily). An examination of family firms across generations shows that a nonfamily CFO always has a positive effect on firm performance, while a family CEO seems to add value only in the first generation. Our study contributes to the literature on family firms by determining how the presence of a nonfamily CFO has an impact on firm performance. We also contribute to the literature on agency theory by showing that in small family firms: a) having a family as majority shareholder is not detrimental to firm performance; and b) a nonfamily CFO might serve to mitigate any ineptness of descendant CEOs while retaining ownership and management in the hands of family heirs, thus avoiding the conflict of interest between family ownership and management.

Keywords: Small Business, Family Firm, CEO, CFO

JEL Classification: G30, G32, G34

Suggested Citation

Di Giuli, Alberta and Caselli, Stefano, Does the CFO Matter in Family Firms? Evidence from Italy (June 1, 2008). Available at SSRN: or

Alberta Di Giuli (Contact Author)

ESCP ( email )

Paris Campus
79, Avenue de la Republique
Paris, 75011

Stefano Caselli

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136

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