The founder chief executive officer: A review of current insights and directions for future research

• Published date: 01 November 2020
• Author: Keshab Acharya,Joshua J. Daspit,Pingshu Li,Michael A. Abebe
• DOI: http://doi.org/10.1111/corg.12348
• Date: 01 November 2020

REVIEW ARTICLE

The founder chief executive officer: A review of current

insights and directions for future research

Michael A. Abebe

1

| Pingshu Li

1

| Keshab Acharya

2

| Joshua J. Daspit

3

1

Department of Management, Robert

C. Vackar College of Business &

Entrepreneurship, The University of Texas Rio

Grande Valley, Edinburg, Texas, USA

2

Department of Management and

Organization, School of Business, Central

Connecticut State University, New Britain,

Connecticut, USA

3

Department of Management, McCoy College

of Business, Texas State University, San

Marcos, Texas, USA

Correspondence

Michael A. Abebe, Department of

Management, Robert C. Vackar College of

Business & Entrepreneurship, The University

of Texas Rio Grande Valley, Edinburg, Texas,

USA.

Email: michael.abebe@utrgv.edu

Abstract

Research Question/Issue: From its inception in the late 1980s and early 1990s,

founder-chief executive officer (CEO) research has garnered significant scholarly

attention in the strategy and entrepreneurship disciplines, although other fields—such

as economics, finance, and family business—have also generated substantial research

insight on this topic. Despite this progress, a limited consensus exists on the influ-

ence of the founder CEO owing to the fragmented nature of extant research. In this

review, we address this fragmentation by reviewing current literature, synthesizing

the discipline-specific findings into an integrated framework, and highlighting promis-

ing directions for future founder-CEO research.

Research Findings/Insights: Using a cross-disciplinary review of founder-CEO

research based on 221 articles from 24 academic journals, we synthesize

current research and provide directions for future research. Our framework organizes

current research on the founder CEO into three broad themes. First, we review

and synthesize scholarly work on factors related to the founder CEO during the

nascent years of the firm. In the second theme, we review research that explores the

impact of the founder CEO on strategic choices and firm configurations. In the third

theme, we review the performance consequences of the founder CEO.

Theoretical/Academic Implications: This review advances research on the founder

CEO by taking stock of insights from various disciplines, highlighting advancements

made, and suggesting promising directions for future research on founder CEOs.

Additionally, a critical evaluation of current methodological approaches provides

opportunities for strengthening the rigor of scholarly inquiry in this area.

Practitioner/Policy Implications: This review provides corporate governance scholars

and policymakers with a current, multidisciplinary summary of research findings on

founder CEOs and their impact on the firm across various stages of the organizational

life cycle.

KEYWORDS

Corporate governance, founder CEO, founder succession, founding team, imprinting, IPO

1|INTRODUCTION

Chief executive officers (CEOs) direct their firms in the pursuit of

opportunities (Hambrick & Fukutomi, 1991; Wang, Holmes, Oh, &

Zhu, 2016), and, as leader of the firm's management team, CEOs have

the power and ability to make decisions that affect the firm and its

outcomes (Hambrick & Quigley, 2014; Mackey, 2008). The founder

CEO—an individual who serves as the chief executive and is the

Received: 2 September 2019 Revised: 12 October 2020 Accepted: 13 October 2020

DOI: 10.1111/corg.12348

406 © 2021 John Wiley & Sons Ltd Corp Govern Int Rev. 2020;28:406–436.wileyonlinelibrary.com/journal/corg

founder or cofounder of the firm (Nelson, 2003)—has strong identifi-

cation with, seeks long-term success for, and develops enduring psy-

chological and emotional ties with and within the firm (Kelly,

Athanassiou, & Crittenden, 2000; Lange, Boivie, & Westphal, 2015;

Miller, Le Breton-Miller, & Lester, 2011; Nelson, 2003). The founder

CEO makes a lasting “imprint”on the culture, structure, and processes

of the firm (Marquis & Tilcsik, 2013; Nelson, 2003; Schein, 1983), and

by retaining the CEO position beyond the startup period, the founder

may continue to yield substantial influence as the organization grows

and becomes more complex (Ling, Zhao, & Baron, 2007; Souder,

Simsek, & Johnson, 2012).

These and other unique aspects of the founder CEO have

attracted the attention of scholars, leading to an extensive examina-

tion of the causes and consequences of founder-CEO leadership. The

last three decades, in particular, include a rapid increase in scholarly

work dedicated to understanding the founder CEOs, their effects

within the firm, and the implications on firm outcomes. While the

majority of research on the founder CEO has been primarily con-

ducted within the strategy and entrepreneurship disciplines, other

fields—such as economics, finance, and family business—have also

generated notable insights on this topic. However, despite the

increased research interest, a limited consensus exists on what is

understood regarding the founder CEO owing to the fragmented

nature of existing research.

To date, much of the literature on the founder CEO has

evolved from either an entrepreneurship-centric perspective or a

strategy-centric perspective. For instance, entrepreneurship

research on the founder CEO predominantly focuses on under-

standing his or her influence during the early stages of the firm

(e.g., Jain & Tabak, 2008; Wasserman, 2017) and implications for

firm growth (e.g., Miller et al., 2011; Willard, Krueger, &

Feeser, 1992), whereas strategy scholarship primarily focuses on

understanding the effect of the founder CEO on strategic firm

choices and performance (e.g., Jayaraman, Khorana, Nelling, &

Covin, 2000; Souder et al., 2012). Given that these streams primar-

ily focus on different stages of the firm life cycle, a comprehensive

understanding of the founder CEO has remained largely fragmen-

ted. Therefore, to offer a more cohesive and comprehensive under-

standing of the founder CEO, we conduct a cross-disciplinary

literature review of 221 articles from 24 academic journals and

synthesize the findings into an integrated framework. Our system-

atic review suggests three common themes within founder-CEO

scholarship around which our review is organized: (1) the founder

CEO during nascent years, (2) the founder CEO's influence on stra-

tegic choices and firm configurations, and (3) performance conse-

quences of the founder CEO.

Overall, this review offers at least three contributions. First, by

conducting a comprehensive, multidisciplinary review of literature,

we consolidate the insights occurring from discipline-specific studies

on the topic. To this end, we offer a comprehensive framework that

integrates multidisciplinary insights in order to broadly conceptualize

the effects related to the founder CEO during startup and early

years of the firm as well as related effects during later stages of the

firm's life cycle. Second, we offer a review of the founder-CEO liter-

ature, which is organized according to the three overarching themes

identified. These themes, which correspond with the integrated

framework offered, generally align with the life cycle of the firm and

highlight effects on the founder CEO during the nascent years of

the firm, the effects of the founder CEO on shaping firm strategies

and configurations as the firm moves to an advanced stage of devel-

opment, and the effect of the founder CEO on firm outcomes. Third,

future research directions are offered. Specifically, after assessing

the overall state of the literature, we highlight promising directions

for future research, which include recommendations for theoretical

and methodological developments necessary to advance founder-

CEO scholarship.

2|METHOD

To gain a comprehensive understanding of founder-CEO research,

we followed the multistep process for searching and identifying

research used by Nordqvist et al. (2013). First, we used EBSCO

Business Source Complete and Google Scholar to identify publi-

shed work with at least one of the following keywords

1

in the

abstract: founder,founding manager,CEO,team,management,status,

firm,business, and entrepreneur. The search included work published

between 1990 and 2020

2

given that founder-CEO research began

appearing in prominent academic journals in the early 1990s. Fur-

ther, the search was conducted using the list of high-quality aca-

demic journals in the fields of economics, finance, and

management from Schiehll and Martins (2016). From this list,

economics-related journals that focus on macrolevel issues were

removed owing to lack of relevance. Additionally, the Journal of

Corporate Finance was added given that the outlet publishes stud-

ies on the founder CEO. Further, we supplemented this list with

prominent journals that publish entrepreneurship research: Entrepre-

neurship and Regional Development,Entrepreneurship Theory and

Practice,Family Business Review,Journal of Business Venturing,Small

Business Economics, and Strategic Entrepreneurship Journal. In addi-

tion to databases, we searched the websites of each journal

included to identify recently accepted papers that are not yet pub-

lished in a volume (e.g., “online first”articles). In all, we searched

25 academic journals

3

and identified 347 articles.

Second, we reviewed all identified articles to retain only those

that fit the focus of this review. Further, we limited the review to pub-

lished (or accepted) articles and eliminated trade publications (21),

book chapters (one), and book reviews (two). We further eliminated

45 articles published in journals not included in our search list. This

resulted in 278 articles remaining.

Third, we reviewed each of these articles. We included both con-

ceptual and empirical articles; however, we only retained articles that

have a primary focus on the founder CEO. In this step, we eliminated

57 articles. In all, this process yielded 221 articles (204 empirical and

17 conceptual) from 24 journals. Figure 1 highlights the increasing

trend of scholarly interest in the topic over time. Indeed, research on

ABEBE ET AL.407