Exploring the Factors Influencing CEO Successor Selection in Malaysian Small Family Businesses

This study extends the understanding of how CEO successor selection occurs in small family businesses, where decision authority is concentrated within the family and formal governance mechanisms are minimal. The objective was to explore the factors influencing CEO successor selection by examining how family, ownership, and business considerations shape the choice of successor. Adopting a basic qualitative research design, this study conducted semi-structured interviews with ten informants from five small family firms, comprising predecessor and successor CEO dyads. Data were analysed thematically through iterative comparison. The findings reveal four interrelated categories of influence: predecessor-related, successor-related, company-related, and external-related factors. Predecessor vision of legacy, trust, religious values, and willingness to transfer authority were central drivers, while successor motivation, early involvement, and experiential competence development strengthened leadership legitimacy. In contrast, rather than determining the selection, company and external factors primarily shaped the timing and formal confirmation of the leadership transition. This study contributes theoretically by conceptualising CEO successor selection as a relational and socially embedded process, thus extending the three-circle model of the family business system. In practical terms, the findings provide small family firms with guidance on more deliberate predecessor and successor preparation, mentoring, and structured transition planning.