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Insights on Family Business by Professor Kasper Nielsen on SCMP

(image credit: SCMP)

The Consequence of Family Succession on Firm Performance

(original article South China Morning Post (Oct 13, 2017))


"...Understanding the consequence of family succession on firm performance also has implications beyond the firm. Nowhere are these challenges more acute than in Asia, where family businesses represent more than half of large corporations and account for a significant percentage of employment and growth.

"... We find that family CEOs tend to underperform in fast-growing industries and in industries with relatively highly-skilled labor forces, environments where managerial skills are presumably more valuable.

"...No other corporate event is as important as family succession to firm performance, and research demonstrates that decisions to appoint family CEOs based on primogeniture rules alone have adverse consequences for firm performance."

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