Non-family CEOs Research Articles

Family firms and carbon emissions

This study examines the relationship between family firms and carbon emissions using a large cross-country dataset of 6600 non-financial firms over the period 2010–2019. We find that family firms emit less carbon than non-family firms, especially after the Paris Agreement. Several factors contribute to this outcome, including governance structure, the degree of family control, R&D spending, and the issuance of green patents. Our study also shows that despite lower carbon emissions, family firms have lower environmental scores, primarily due to their reduced public commitment to emission reduction. Both environmental scores and carbon emissions increase when non-family CEOs are appointed and when family ownership decreases, indicating that agency conflicts may influence these outcomes.

Female CEOs’ name gender-neutralization and audit fees: Evidence from China

We focus on how inconsistency or conflict between actual biological sex and name gender-orientation affects CEO trustworthiness, and thus firm audit fees. This study of Chinese listed firms led by female CEOs finds that female CEOs’ name gender-neutralization significantly reduces audit fees, and the presence of female auditors mitigates the above negative relationship. Mechanism tests find that female CEOs’ name gender-neutralization reduces audit fees by adopting positive tone, enhancing TMT stability, and improving social image. Heterogeneity analysis from the perspectives of CEO and auditor traits demonstrate that when female CEOs were born before the 1970s, also serve as chairmen, and are non-family CEOs, as well as when auditors tenure is shortened, audit report time lag is decreased, and the audit team gender structure is singular, female CEOs’ name gender-neutralization reduces audit fees more significantly. We find no evidence that female CEOs with masculine or gender-neutral names perform better or worse than those with feminine names in any substantive way. Additionally, female CEOs’ name gender-neutralization does not have a consistent effect on positive and negative abnormal audit fees.

Do Family Owners Hold Nonfamily CEOs More Accountable Than Family CEOs for Firm Performance? A Dynamic Perspective

Do Family Owners Hold Nonfamily CEOs More Accountable Than Family CEOs for Firm Performance? A Dynamic Perspective

Impact of Nonfamily CEOs’ Origin on Foreign Market Entry of Family Firms

Impact of Nonfamily CEOs’ Origin on Foreign Market Entry of Family Firms

The Choice between Family CEO and Non-Family CEO: What Are the Determinants?

We examine the factors that influence family firms that are no longer run by the founder, to appoint a chief executive officer from the family rather than from outside the family. Based on agency and signaling theories, we hypothesize that the concentration of family ownership and the presence of the founder increase the likelihood of appointing a family CEO, whereas the gap between voting rights and cash-flow rights (excess voting rights) decreases it. Our regression analyses of Canadian S&P/TSX family firms over the 2002–2008 period confirm our theory that contextual governance factors are good predictors of the type of CEO chosen in family firms.

Do Non-Family CEOs Decrease Stock Price Crash Risk in Chinese Family Firms?

Do Non-Family CEOs Decrease Stock Price Crash Risk in Chinese Family Firms?

Investigating the Role of Non-family CEOs in Knowledge Diffusion and Investment Behavior in Family Firms During Succession

Investigating the Role of Non-family CEOs in Knowledge Diffusion and Investment Behavior in Family Firms During Succession

Corporate governance, tax avoidance and earnings management: family CEO vs non-family CEO managed companies in Indonesia

Corporate governance, tax avoidance and earnings management: family CEO vs non-family CEO managed companies in Indonesia

Unique types and innovation input of family firm CEOs: moderating role of managerial ability in Chinese listed firms

In family firms the role of CEO is highly significant with reference to devise strategic decisions and deciding if it is feasible to invest in innovation input. This study aims to investigate the behaviour analyses of the diverse types of CEOs in family firms towards innovations. This study also analyzes the moderating role of managerial ability in the nexus of CEO types and innovation input. The data are obtained from Chinese A-share listed family firms from Accounting Research and China Stock Exchange in 2012–2020 and analysed using ordinary least squares regression. Tobit and probit regressions are also employed to confirm the results. Results indicate that non-family and family CEOs (with no controlling rights) show identical behaviour concerning their lower intentions to promote innovations in R&D projects than family CEOs with actual controlling rights. In addition, family CEOs with actual controlling rights exert a positive effect on R&D, indicating that they are more willing to invest in innovative projects. Moreover, we observe the significant moderating role of managerial ability in the nexus of CEO types and innovation activities. We find that high managerial ability alters the behaviour of different CEOs. With the moderation of managerial ability, non-family and family CEOs (without actual controlling rights) also show willingness to invest in innovative projects and without managerial ability, CEOs’ willingness to make innovations decline. This study is a pioneer work that investigates the impact of diverse types of CEOs to unlock notable insights regarding the R&D investment behaviour of Chinese family firms with moderating role of managerial ability. This study is useful to all parties involved with the company, including employees, clients, suppliers and customers. The results of this study can also assist board members in selecting and recruiting non-family CEOs or keeping family CEOs (with or without actual controlling rights).

Innovation Promoter or Inhibitor? Non-Family CEO's Effect on Innovation in Family Businesses

Increasing scholarly and practical attention is being paid to determining whether a nonfamily chief executive officer (NFC) is a remedy for the lack of firm innovativeness in the face of ever-changing markets. Departing from the inconclusive findings of NFC research, this article aims to revisit the NFC effect on a family firm's investment in innovation, which is subject to the contextual influence of governance arrangements. In a sample of 6201 firm-year observations of Taiwanese family firms in high-tech industries in the period from 2002 to 2017, we found that the mixed relationship between the NFC and innovation investment is better clarified by considering family involvement in management (FIM) and board independence (BI), both of which yield significantly negative and positive moderating effects on the innovation investment of NFCs, respectively. This article further examines the configurational effect of two moderators on the main relationship, and shows that the negative effect of FIM not only outweighs, but also deteriorates, the positive moderating effect of BI. Our findings contribute not only to family business research, but also to innovation literature by arguing that the risk-taking orientation of an NFC is not universally held, but rather is deliberately arranged for effect.

How do non-family CEOs influence family firm innovation performance?

PurposeWhile the relationship between non-family CEOs and corporate innovation in China has been widely studied, the results remain inconclusive. This study explores the relationship between non-family CEOs and corporate innovation in the context of intergenerational succession. It considers the background and background characteristics of non-family CEOs in an attempt to provide a theoretical foundation for human resource management and innovative strategic management that can be applied in the transformation of family companies.Design/methodology/approachThe authors develop, then test, a series of hypotheses using an econometric analysis of a large sample of Chinese listed family firms. To control for endogeneity problems, such as missing variables in the model and the selectivity bias of the sample, propensity score matching (PSM) model is applied to analyze the panel data of 452 listed family firms from 2009–2019.FindingsThis study first validates the mechanism by which non-family CEO background characteristics affect innovation performance in family firms. It then reveals the varying moderating effects of two stages of intergenerational succession (i.e. later-generation participation in management and later-generation take-over management) that influence the relationship between non-family CEOs and corporate innovation.Originality/valueThe study's findings based on upper echelon and imprinting theory complement and extend existing research by revealing the impact of non-family CEOs from different backgrounds, and also identifying the role of intergenerational succession in the relationship between non-family CEO background characteristics and innovation performance.

Family Owner–Nonfamily CEO Relational Practices Shaping CEO Succession: Handling Equivocality and Relational Balancing

This study focuses on family owner–nonfamily CEO relational practices and what these relational practices constrain and potentiate in family firm CEO succession. Our main contribution is developing a constructionist relational practice perspective and approach as an alternative to the entitative view that dominates the family business literature. We illustrate the relational practice perspective through our dialogically structured inquiries with family owners and nonfamily CEOs. We co-develop practical wisdom on how family owner–nonfamily CEO relational practices can construct stuckness in organizing or, conversely, open up new possibilities to go on depending on (i) the way the family owner and nonfamily CEO “handle” equivocality and tension they continuously (re)produce through their relational practices and (ii) the way they enact “relational balancing” to equilibrate their relation in the making in terms of value/self-worth maintenance by involving other actors, such as board members, management team members, or a coach.

Why do family firms dismiss their family CEOs? A perspective on kinship ties.

Existing studies have suggested that nonfamily CEOs are more likely to be fired from family firms, while we focus on why family CEOs are also fired from family firms. Using data from 455 listed Chinese family firms, we find that family CEOs with affinity ties are more likely to be dismissed as they are not genetically related to the family. The difference becomes greater when firm performance is poor or family ownership is high. These findings elaborate that business-owing family is not a group with aligned interests, that is, family members with different family identities are treated differently within family. Besides, existing studies have emphasized that the preservation of socioemotional wealth in family firms can affect firms' operations, while this study further proposes that the preservation of socioemotional wealth can also have an impact on the business-owning families themselves.

CEO risk preferences in family firms: Combining socioemotional wealth and gender identity perspectives

Challenging the established notion that women at the top are consistently risk averse, this study combines insights from social identity and socioemotional wealth (SEW) perspectives to propose a novel view of risk preferences by women and men CEOs in family businesses. It reframes risk preferences as behavioral responses by gender and family (managerial) role expectations relative to social aspirations. An empirical test of Italian firms provides support for the hypothesized effects. For firms above social aspirations, women family CEOs take more risk as performance declines than their men family counterparts; this gap in risk preferences attenuates for men/women nonfamily CEOs. For firms below social aspirations, these effects are reversed. This study contributes to research on gender identity and risk-taking in family firms by showing that women and men do not always behave according to gender stereotypes. Rather, due to malleability of gender identity, they enact differing risk behaviors across contexts. In addition, it advances SEW theory by unpacking the effects of distinct SEW dimensions on firm risk by gender identity.

Management innovations in family firms after CEO successions: Evidence from Japanese SMEs

We examine management innovation of family and non-family firms after CEO successions by using data of small- and medium-sized enterprises (SMEs) in Japan. Consistent with predictions based on the resource-based view and agency theory, we find that family firms managed by non-family professional CEO successors are less innovative than those managed by family CEO successors or non-family firms. Further analyses indicate that limited access to family-based resources is a key determinant of the conservativeness of professional CEO successors. Our findings suggest the importance of the congruence of ownership and management in family firms due to CEOs’ access to family-based resources.

Family Firms Going Public: the Choice of the CEO at an Initial Public Offering

Building on the signalling theory, the present study theorizes that family overhang, which indicates the quota of shares retained by the family over the quota of shares offered at IPO, positively affects the likelihood of choosing a non-family CEO versus a founder family CEO or a non-founder family CEO at the IPO stage. That is, family IPOs use the non-family CEO status as a non-family related signal for the market. Yet, in choosing between a founder family CEO and a non-founder family CEO at the IPO stage, the former is more likely to be selected. Additionally, family generational involvement strengthens the above-mentioned relationships. Drawing from a sample of Italian family firm IPOs, important theoretical contributions flowing from our study are shared in the concluding section.

Managerial ability and CEO pay of family firms in Malaysia: does family involvement in management matter?

ABSTRACT Family managers are found to get lower pay, especially when family members are involved in management. This paper examines whether managerial ability has a positive impact on CEO pay in family firms. We further examine whether the relationship is higher for nonfamily CEOs compared with that for family CEOs, and whether family involvement in management affects the relationship. The data covered were hand-collected information on CEOs of 362 listed family firms in Bursa Malaysia during the 2009–2015 period. We found a positive relationship between pay and managerial ability for Malaysian family firms, and nonfamily managers are found to be compensated with a higher pay for their managerial ability compared with family managers. Also, when a family has a dominant involvement in management by chairing the board and remuneration committee, they accord pay increment for every unit increase in a CEOs ability. In the case of family chairing the board, nonfamily CEOs tend to get a higher pay with higher managerial ability compared with family CEOs. Our finding shows that family firms, especially those with a dominant involvement in management, adhere to devising first-best contract when rewarding nonfamily CEOs.

PENGARUH FAMILY-CEO dan DIRECT OWNERSHIP TERHADAP KEBIJAKAN DIVIDEN FAMILY-FIRM

We investigate the effect of family-CEO on firm’s dividend policy at Indonesia firm of Consumer Goods sector in 2016-2020. In this study, researchers focused on dividend policy by applying the family firm literature and agency problem theory to obtain or detect differences. This research use multiple regression analysis with Eviews software. We show that family-CEO firms pay same amount of dividends with nonfamily-CEO firms do. Empirically, this study proves that family CEO companies do not have a significant relationship with dividend policy, with the hypothesis being examined that family CEO companies pay less dividends than non-family CEO companies and the direction of influence of the company Family CEO on dividend policy is negative. In addition, that direct ownership has a significant positive effect on dividend policy. This shows that the company with direct ownership, the higher the company distributes dividends to shareholders. Investors can use this research to get more information about family firm before investing on it. Keywords: family-CEO, dividend policy, family firm

Hovione names new CEO

Hovione has appointed as CEO its chief operating officer, Jean-Luc Herbeaux, effective April 1. Herbeaux succeeds Guy Villax, who has been CEO of the family-owned pharmaceutical services company for 25 years. Herbeaux joined the firm in 2020. He previously held several management positions at the German chemical maker Evonik Industries, where his final role was head of the health-care business. In November, he and Villax outlined a $170 million investment program through 2023 that they said will increase Hovione’s production capacity by about 25%. Villax is credited with moving the company into the exclusive synthesis of active pharmaceutical ingredients (APIs) for drug industry customers. Hovione, one of several family-owned drug services companies in Europe, saw sales grow by 10 times under Villax’s stewardship. Major investments included the purchase of a Pfizer plant in Ireland in 2009. Villax says Hovione’s board chose to hire a nonfamily CEO in response to growth

Corporate Governance and Organizational Social Responsibility: discussion about the Multilatinas case

This paper explores the relationship between Corporate Governance and Corporate Social Responsibility (or Organizational Social Responsibility). To this end, the document is based on a case study about a Colombian long-tradition firm known as Organización Carvajal, which has extended its activity all over Latin America. The case study covers the period 2008-2015, between the arrival of a non-family CEO to the last year containing enough information about the subject at the research time. The relationship between the Corporate Governance and the Organizational Social Responsibility is studied based on a model that considers the interest of the majority-owners-block-family and CEO about the firm outlays for the Organizational Social Responsibility. The presentation is built as follows: first, central issues of the disciplinary context are shown. They are centered on placing the Corporate Governance-Organizational Social Responsibility relationship in Multilatinas among the organizational discussion. Second, the literature review explains the conceptual frame to visualize both the relationship mentioned above and the fieldwork. This part sets the theoretical model used as a referent. Finally, the case is described, discussed and the conclusions incorporated. The findings suggest that the CEO – owner agency problem in this Multilatina is not significant enough to become the main reason to alter the relationship between Corporate Governance and Organizational Social Responsibility.