PAST PERFOMANCE, FAMILY BUSINESS AND CEO SUCCESSION : THE CASE OF INDONESIA

This study examines the firm past performance to the appointment of the new CEO in Indonesian listed family owned business. Further, it also investigates the influence of family member composition in Board of Directors and Board of Commissioners also successor firm experience to the CEO succession. The analysis encompasses 148 succession events of Indonesian listed family owned business from ORBIS database for the years 2006-2015. The logistic regression methodology is used to examine these research questions. The results show that the appointment of the new CEO generally influenced by firm past performance and family member composition in Board of Directors. Negative past firm performance will lead Indonesian listed family owned business to choose CEO from outside the family member and the more number of family members sitting on the Board of Directors will lead family owned business to select the new CEO from inside family member. However, family member composition in Board of Commissioners and successor firm experience are found has no influence on CEO succession decision selection. This finding implies that firm past performance and family member composition in Board of Directors affect the CEO succession selection decision whether to choose from inside family member or outside family member. Keywords: Family Owned Business, CEO Succession, Board of Directors, Board of Commissioners, Successor Firm Experienc