Corporate Governance has prominent and important role in the sustainability of family business company. Based on previous research results, it is a big challenge for family firms to sustain their business until third generation and following generations, which corporate governance become an important aspect to be noticed.

Previous family business research papers are less focus on the Asia-Pacific and the Southeast Asian family firms. Most of the family firms in Southeast Asia are dominated by overseas Chinese family firms, include in Indonesia. This research uses an Indonesian family business which owned by a group of Indonesia overseas Chinese family that has already entered its third generation. We aim to understand comprehensively on how the family business can sustain to third generation by conducting a qualitative research and using a case study method. Family business corporate governance model, paternalistic behavior, and overseas Chinese business characteristic are used to analyzed the firm corporate governance practices.

This study shown several significant improvements in the third generation compared to its previous generations. The third generation firm tends to develop prominently in their marketing strategy and R&D, uses expert top management outsider players, and only apply four out of seven points of paternalistic behavior. However, they still use centralized decision making system and insider system of financing.

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