Time: June 25th, 2019 (Tuesday) 14:30 – 16:00

　　Location: 611A Meeting Room, National School of Development, Peking University

　　Speaker: Prof. Wei Shen

　　Could there be a socioemotional bond? An evolutionary perspective of Professional CEOs’ risk of dismissal IN FAMILY-CONTROLLED FIRMS

　　Wei Shen (Arizona State University)

　　Abstract

　　This study advances an evolutionary perspective of the relationship between the controlling families and the professional CEOs to better understand professional CEOs’ risk of dismissal in family-controlled firms. Instead of treating it as static, we propose that the relationship between the controlling families and the professional CEOs can evolve from an arm’s length economic relationship into a socioemotional bond that is based on a high level of trust, respect and affect, either over a substantive period of time or through a transformational event such as an externally imposed financial crisis. Consequently, we predict that professional CEOs’ risk of dismissal is reduced and its association with firm financial performance is weakened after they survive the probationary period during the early stage of their tenure or go through a financial crisis with the controlling families. Using data on a large sample of family-controlled firms in Taiwan from 1999 to 2013, we found empirical evidence consistent with the above theoretical predictions. Our study contributes to the growing family business literature regarding the relationship between the controlling families and professional managers. It also has important implications for corporate governance research on the principal-agent relationship where the principal is a large controlling shareholder.

　　About the Speaker

　　Wei Shen is a professor and Associate Dean for China programs at the W. P. Carey School of Business. In his role, he oversees all aspects of the China programs, which include the EMBA and DBA programs designed for high-level executives and decision makers. Before joining ASU in 2010, he was an associate professor at the University of Florida.

　　Professor Shen is a noted researcher on topics including strategic leadership, corporate governance, organizational search, and research methodology. His research has appeared in the top-tier journals of his field, including the Academy of Management Journal, Academy of Management Review, Administrative Science Quarterly, and Strategic Management Journal.

　　He has served on the editorial boards of several premier journals, including the Academy of Management Journal, Academy of Management Review, Journal of Management and Governance, Management and Organization Review, and Strategic Management Journal.