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

Authors: Wisnu Untoro; Wulan Permatasari; Irwan Trinugroho; Doddy Setiawan

Addresses: Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36 Surakarta 57126, Indonesia ' Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36 Surakarta 57126, Indonesia ' Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36 Surakarta 57126, Indonesia ' Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36 Surakarta 57126, Indonesia

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.

DOI: 10.1504/IJTGM.2017.086071

International Journal of Trade and Global Markets, 2017 Vol.10 No.2/3, pp.236 - 250

Received: 10 Oct 2016
Accepted: 22 Oct 2016
Published online: 22 Aug 2017 *

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