Edited by Jonas Gabrielsson, Wafa Khlif and Sibel Yamak
Chapter 7: Family directors monitoring non-family managers: the impact of family representationin the board of directors on CEO replacement decisions after poor performance
In this chapter we analyse the behaviour of family directors in their relationship with non-family managers, focusing on the influence of board composition on the CEO replacement decision. We compare family- and non-family-controlled companies and explore the differences among family firms with respect to board-level attributes, namely family representation and ownership dispersion among directors. We perform our analysis on data drawn from a panel of Italian listed companies over a ten-year period. Our results suggest that family directors behave distinctively with respect to (1) the definition of goals that the CEO must pursue and (2) the characteristics of the monitoring process.
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