Although restricting executive talent to a labor pool of family members can be problematic, a family CEO can bring special skills and attributes to the firm that outside managers do not possess. Morck et al. (1988) suggest that founder CEOs bring innovative and value-enhancing expertise to the firm. Moreover, Davis, Schoorman, and Donaldson (1997) argue that family members act as stewards and, as such, identify strongly with the firm and view firm performance as an extension of their own well-being. Anderson et al. (2002) suggest that the family’ssustained presence in the firm also creates powerful reputation effects that provide incentives for family managers to improve firm performance. Consequently,active family participation in firm management can potentially lead to performance differentials relative to nonfamily firms.