Abstract
This study examines the effects of family and business group controlling shareholders on CEO power. We draw on the literature on comparative corporate governance to maintain that families and business groups shareholders have distinctive preferences for CEO power. Specifically, family shareholders prefer to have a CEO with a clearer, stronger image as such an image is commensurate with their expectations for corporate leaders. Alternatively, business group shareholders tend to grant a CEO with less direct influence on a firm as the group emphasizes economic goals. These distinctive views prompt boards to grant varying power to their CEOs. We furthermore argue that the effects of families and business groups on CEO power would be altered by certain contingencies. Results based on a sample of public firms in Taiwan support our predictions. Implications for theories are discussed.
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