Past performance, family business and CEO succession: the case of Indonesia

Wisnu Untoro, Wulan Permatasari, Irwan Trinugroho and Doddy Setiawan

International Journal of Trade and Global Markets, 2017, vol. 10, issue 2/3, 236-250

Abstract: This paper examines the link between firm past performance and the appointment of new CEOs in the Indonesian publicly traded family-owned firms. Further, we also investigate the effect of family member composition in the board of directors and board of commissioners on the CEO succession. This study encompasses 148 succession events gathered from ORBIS database for the period of 2006-2015. Employing a logistic regression, results show that the appointment of new CEOs is generally affected by firm past performance and family member composition in the board of directors. Negative past performance would lead firms to select non-family member. Further, the more the number the family members sitting on the board of directors, the higher the probability family-owned firms to select the new CEO inside family member.

Keywords: board of commissioners; board of directors; CEO succession; family-owned firms; successor firm experience. (search for similar items in EconPapers)
Date: 2017
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