A study led by The University of Western Australia found in times of crisis the resilience of family businesses that had a family member as CEO varied depending on generational dynamics.
Associate Professor Donella Caspersz, from UWA's Business School, was lead author of the study published in Sage Journals.
"At least 70 per cent of firms around the world are run by families and as a result the CEO is often a family member," Associate Professor Caspersz said.
"We wanted to know if being a family member influenced CEO resilience, especially in times of crisis, such as the recent COVID-19 pandemic."
Researchers analysed data from 67 family businesses, examining family dynamics at individual, family, and business levels for both single and multigenerational firms.
CEOs of single-generation family businesses were found to be resilient at the business and family levels.
In multigenerational family businesses, the CEO resilience was drawn from relations with and between family members.
"In single-generational firms, family presence on the board or 'family through reign' creates strong attachment to the business," Associate Professor Caspersz said.
"In multi-generational firms, family relationships can galvanise the CEO to behave as a steward of the business."
Researchers concluded that CEO resilience was influenced by a diversity of conditions, with family dynamics being important for both single and multigenerational firms.
"Our findings highlight the importance for family businesses to focus on relationships at an individual and family level, as well as business-level competency to strengthen CEO resilience," Associate Professor Caspersz said.
