Determinants of CEO Succession Decisions in Family Firms

CEO successions in family firms are important events. In family firms with founder CEOs, they are particularly consequential, as their outcome determines whether the firm continues as a family firm and, if so, in what form. Founder CEOs have three options. They can sell the firm upon retirement. Alternatively, they can keep the firm within the family by appointing a family member or a professional CEO as their successor. While an extensive literature examines the consequences of CEO successions in family firms, the literature on the determinants of CEO successions – including the choice of CEO successor – in such firms remains sparse. We review the latter literature, including research on succession planning and succession management. We conclude by suggesting avenues for further research.