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

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  • Yves Bozec
  • Kim Trottier
  • Jackie Di Vito

Abstract

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.

Suggested Citation

  • Yves Bozec & Kim Trottier & Jackie Di Vito, 2024. "The Choice between Family CEO and Non-Family CEO: What Are the Determinants?," International Journal of Business and Management, Canadian Center of Science and Education, vol. 19(4), pages 151-151, July.
    • Handle: RePEc:ibn:ijbmjn:v:19:y:2024:i:4:p:151
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    References listed on IDEAS

    as
    1. Yan Zhang & Margarethe F. Wiersema, 2009. "Stock market reaction to CEO certification: the signaling role of CEO background," Strategic Management Journal, Wiley Blackwell, vol. 30(7), pages 693-710, July.
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    4. Yves Bozec & Claude Laurin, 2008. "Large Shareholder Entrenchment and Performance: Empirical Evidence from Canada," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 35(1-2), pages 25-49.
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    9. Ronald C. Anderson & David M. Reeb, 2003. "Founding‐Family Ownership and Firm Performance: Evidence from the S&P 500," Journal of Finance, American Finance Association, vol. 58(3), pages 1301-1328, June.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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