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 language | English |
|---|---|
| Pages (from-to) | 461-484 |
| Number of pages | 24 |
| Journal | Journal of Business Finance and Accounting |
| Volume | 36 |
| Issue number | 3-4 |
| DOIs | |
| Publication status | Published - 6 May 2009 |
Keywords
- CEO turnover
- corporate restructuring
- family managed firms
- firm performance