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

Author

Listed:
  • Wisnu Untoro
  • Wulan Permatasari
  • Irwan Trinugroho
  • Doddy Setiawan

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.

Suggested Citation

  • Wisnu Untoro & Wulan Permatasari & Irwan Trinugroho & Doddy Setiawan, 2017. "Past performance, family business and CEO succession: the case of Indonesia," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 10(2/3), pages 236-250.
    • Handle: RePEc:ids:ijtrgm:v:10:y:2017:i:2/3:p:236-250
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    Cited by:

    1. Iman Harymawan & Mohammad Nasih & Muhammad Madyan & Diarany Sucahyati, 2019. "The Role of Political Connections on Family Firms’ Performance: Evidence from Indonesia," IJFS, MDPI, vol. 7(4), pages 1-14, September.

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