Title: Outside CEO, Board of Commissioners Control, Operating Cash Flow, Company Performance, CEO Tenure and Funding Policy for Family Companies
Author: Ahmad Aziz Putra Pratama
Item Type : Thesis (Thesis)
Affiliations: Master of Management Science Study Program, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia
Publisher: Universitas Airlangga
Abstract
Family companies have a unique phenomenon so researchers are interested in making observations. This is because most companies in Indonesia and in various other countries are family-based companies. During its development, there are several family companies that have decided to appoint CEOs outside the family circle to lead company management. This research uses a sample of 240 non-financial sector family companies listed on the Indonesia Stock Exchange (BEI) with 1,605 observations. Data was obtained through the company's financial and annual reports for the period 2008 to 2018. The aim of this research is to examine the influence of outside CEOs on family company debt levels as well as the moderating effect of the control of family members on the board of commissioners, operating cash flow, company performance and CEO tenure on the influence outside CEO on family firm debt levels. The dependent variable of this research uses the debt level of the family company and the independent variable is the outside CEO. The moderating variables in this research are the control of family members on the board of commissioners, operating cash flow, company performance and CEO tenure. This research uses multiple linear regression methods and moderated regression analysis (MRA). The research results show that family companies led by an outside CEO have lower levels of debt compared to family companies led by a family CEO. The control of family members on the board of commissioners, operating cash flow, company performance and CEO tenure weaken the negative influence of outside CEOs on family company debt levels. The results of this research are novelty in financial management literature.
Keywords: family firm's debt level, outside CEO, board of commissioners, operating cash flow, firm's performance, CEO tenure
