When do Non-Family CEOs Outperform in Family Firms? Agency and Behavioural Agency Perspectives
Danny Miller, Isabelle Le Breton-Miller, Alessandro Minichilli, Guido Corbetta, Daniel Pittino
Journal of Management Studies · 2014 · Volume 51 · Issue 4
Abstract
Family firms represent a globally dominant form of organization, yet they confront a steep challenge of finding and managing competent leaders. Sometimes, these leaders cannot be found within the owning family. To date we know little about the governance contexts under which non-family leaders thrive or founder. Guided by concepts from agency theory and behavioural agency theory, we examine the conditions of ownership and leadership that promote superior performance among non-family CEOs of family firms. Our analysis of 893 Italian family firms demonstrates that these leaders outperform when they are monitored by multiple major family owners as opposed to a single owner; they also outperform when they are not required to share power with co-CEOs who are family members, and who may be motivated by parochial family socioemotional priorities.
Keywords
co-leadership, family firms, non-family CEOs, ownership structure
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