Firm performance and managerial succession in family managed firms

Research output: Contribution to journalArticle

35 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)461-484
Number of pages24
JournalJournal of Business Finance and Accounting
Volume36
Issue number3-4
DOIs
Publication statusPublished - 6 May 2009

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Chief executive officer
Firm performance
Stock prices
Operating performance
Shareholders
Replacement
Internal governance

Keywords

  • CEO turnover
  • corporate restructuring
  • family managed firms
  • firm performance

Cite this

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title = "Firm performance and managerial succession in family managed firms",
abstract = "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.",
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Firm performance and managerial succession in family managed firms. / Hillier, D.J.; McColgan, P.

In: Journal of Business Finance and Accounting, Vol. 36, No. 3-4, 06.05.2009, p. 461-484.

Research output: Contribution to journalArticle

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