Owner-management, Professional CEO and Firm Performance: Evidence from Korean Firms

This study examines the relationship between owner-management, professional CEO and firm performance with multiple empirical approaches. The results show that the owner-managed firm is shown to take up the majority proportion in Korea, and significantly positively related to firm performance. The model of separation of ownership and management mentioned by Berle and Means(1932) is still rare in Korea, even after the Asian financial crisis. On the other hand, existence of professional CEO in the owner-managed firm did not have much influence on firm performance. It suggests that professional CEO, which is normative governance practice in Western context, still cannot be independent from the influence of owner-management and cannot demonstrate their capabilities to the fullest. These findings highlight the importance of further studying the owner-management and the role of professional CEO in Asia context.