Valentino D’angelo presents his academic paper “Family Agents” in occasion of the EuFBC Seminar

Several companies around the world are led by more than one CEO, giving rise to the phenomenon of co-CEOs. This observation has stimulated an entire new literature on the strategic implications of shared corporate leadership. Our study investigates how co-CEOs influence corporate investments under different conditions of equity ownership and governance. We argue that while family businesses adopt more frugal investment policies than non-family businesses, having more CEOs in family businesses increases overinvestment due to the potential divergence in terms of priorities given by their respective agendas. Our analysis confirms that in family businesses, co-CEOs favor an excess of investment activity. However, we find that the effect of co-CEOs on overinvesting in family businesses is smaller when the company is subject to strong monitoring by the board of directors, and higher when co-CEOs belong to branches. different family members. Contrary to the view that family actors represent a homogeneous group with aligned interests and preferences, our study shows that the fragmentation of leadership among multiple actors can have a cost to the family business.

Link: https://eufbc.org/