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Journal of Management and Governance

Erschienen in:

01.11.2016

The impact of family owners’ monitoring on CEO turnover decisions and the role of trust

verfasst von: Davide Rizzotti, Claudia Frisenna, Roberta Mazzone

Erschienen in: Journal of Management and Governance | Ausgabe 3/2017

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Abstract

Even though there is clear evidence that large shareholders play an effective monitoring role over poorly-performing CEOs, the monitoring of family owners is yet quite unexplored. This study investigates the impact of family ownership on the CEO turnover-performance sensitivity, examining two potential factors that can affect the ability of the family owners in ensuring a prompt replacement of an underperforming CEO. First, we examine whether the monitoring of family owners is weakened by the existence of family ties with CEO. Second, we investigate whether the monitoring of family owners over professional CEOs is affected by the cultural propensity to trust or distrust a stranger. Our findings show that family owners are able to ensure a prompt replacement of an underperforming CEO only when the CEO is not a family member but rather an outside professional. Moreover, we find that the effectiveness of the family’s monitoring over professional CEO is weaker in environments characterized by the cultural propensity to distrust a stranger, rather than in contexts characterized by the cultural feeling to trust an outsider.

Vorheriger Artikel Executive remuneration standards and the “conformity gap” at controlled corporations

Nächster Artikel Board characteristics effects on performance in family and non-family business: a multi-theoretical approach

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Titel: The impact of family owners’ monitoring on CEO turnover decisions and the role of trust
verfasst von: Davide Rizzotti
Claudia Frisenna
Roberta Mazzone
Publikationsdatum: 01.11.2016
Verlag: Springer US
Erschienen in: Journal of Management and Governance / Ausgabe 3/2017
Print ISSN: 1385-3457
Elektronische ISSN: 1572-963X
DOI: https://doi.org/10.1007/s10997-016-9367-z

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