Abstract
This paper examines the relationship between board education, board size, growth, ownership and firm performance of family CEO and nonfamily CEO listed firms in Malaysia. A sample of 37 firms and data were collected over a period of five years from 2012 to 2016. The 37 samples of family firms were subdivided into family CEO (21), and non-family CEO (16) firms. The independent variables were board education as measured by the proportion of board degrees (BDEG) and the proportion of board professional qualifications (BPRO), board size (BSIZE), growth, and ownership. Meanwhile, firm performance was measured by using return on equity (ROE) and return on assets (ROA). The findings showed that there was a significant difference between family CEO and non-family CEO firms at a five percent level for board professional qualifications confirming that altruism and nepotism were observed among family members which supported the argument of characteristics of nepotism such as granting jobs to family members regardless of merit. In addition, this study also found board professional qualifications as significant but negatively related to external firm performance in family CEO firms. This showed that board education has not really been emphasized among board members. Besides, growth has significant influence on family firm performance which is evidently reflected in their contribution to the country’s GDP.
Highlights
Businesses are predominantly affluent companies that have flourished through wealth generation
This study shows that board professional qualifications is negative but significantly related to return on equity (ROE) of family chief executive officer (CEO) firms
Board qualifications as proxied by only the proportion of board professional qualifications significantly decreased the performance of family CEO firms
Summary
Businesses are predominantly affluent companies that have flourished through wealth generation. To ensure high corporate governance quality of firms through identification and measurement of its capabilities, board members especially the chief executive officer (CEO) has to obtain educational qualifications which include a degree(s) or postgraduate recognition for better and reliable communication with the stakeholders (Bhagat, Bolton & Subramanian, 2010). There are findings which show fast-growing and high-performing firms that are founded and managed by average-educated individuals These contradicting results from previous studies complicate the importance of board educational qualifications, and these studies are comparatively scarce within the literature. The study on family firms which have been managed by the family CEO and non-family CEO in Malaysia, needs to be investigated to find out whether their board educational qualifications play an important role in sustaining their firm performance or otherwise. There needs to be further research to investigate the emphasis on family firms as family businesses which are governed by family traits, do not exist in other businesses (Mishra et al, 2001)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
