Family firm CEOs and their effect on firm-level entrepreneurial orientation: The board of directors as an important mediator

Abstract

This article analyses the relationship between the generational stage of the CEO and family firm entrepreneurial orientation (EO). Based on notions from family orientation and identity theory, we argue that CEO’s personal priorities shift between first and later generations which affects the firm’s EO. As little is known about how CEO’s individual priorities shape firm-level EO, our model clarifies how board behavior mediates this relationship. More specific, we argue that CEOs use their power to influence the behavior of the board in accordance with their personal priorities, and consequently shape EO. Using a sample of 211 Belgian family firms, this study not only finds that founder-led firms show higher levels of EO than firms that are led by subsequent generations, but also, board behavior is found to mediate these relationships.