The Determinants of the CEO Successor Choice in Family Firms

54 Pages Posted: 25 Jan 2014

See all articles by Iram Fatima Ansari

Iram Fatima Ansari

Cardiff Business School, Cardiff University; College of Economics & Political Science, Sultan Qaboos University

Marc Goergen

IE Business School, IE University; European Corporate Governance Institute (ECGI)

Svetlana Mira

Cardiff University

Date Written: January 22, 2014

Abstract

This paper studies the factors that influence the CEO succession decision in family firms whose incumbent CEO is a member of the controlling family. The sample includes all such firms from France, Germany and the UK. We propose a new measure of directors’ independence, which adjusts for various links with the controlling family. While we find that conventionally defined directors’ independence has no impact on the CEO succession decision, our corrected measure reduces the likelihood of the successor being another family member. There is also evidence that firms from France that are cross-listed in the UK or USA are less likely to appoint another family CEO.

Keywords: Family firms, CEO succession, corporate governance, corporate control and ownership

JEL Classification: G32, G34

Suggested Citation

Ansari, Iram Fatima and Goergen, Marc and Mira, Svetlana, The Determinants of the CEO Successor Choice in Family Firms (January 22, 2014). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 406/2014, Available at SSRN: https://ssrn.com/abstract=2383214 or http://dx.doi.org/10.2139/ssrn.2383214

Iram Fatima Ansari (Contact Author)

Cardiff Business School, Cardiff University ( email )

Cardiff CF10 3EU
United Kingdom

College of Economics & Political Science, Sultan Qaboos University ( email )

Al Khod, Muscat
Oman

Marc Goergen

IE Business School, IE University ( email )

Finance Department
Maria de Molina, 12
Madrid, 28006
Spain

HOME PAGE: http://www.ie.edu/business-school/faculty-and-research/faculty/marc-goergen/

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Svetlana Mira

Cardiff University

Aberconway Building
Colum Drive
CF10 3EU Cardiff, Wales CF10 3EU
United Kingdom

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