Search results

In early 2014, the family leadership of Bush Brothers & Company, a leading player in canned vegetables (its Bush's Best line dominated the canned-beans market), faced questions about the family's vision for the future in light of an imminent leadership transition: third-generation member, longtime board chair, and, until recently, CEO Jim Ethier planned to leave his role as early as 2015. The family was into its sixth generation, with nearly sixty family shareholders spread across four branches. On the business side, the first non-family CEO was overseeing development of a growth strategy, including ongoing ventures into competitive new markets such as Hispanic foods. Its fourth-generation leaders including Drew Everett (vice president of human resources and shareholder relations, and likely board chair successor), Sarah (chair of the family senate), and Tony (chair of the family's private trust company) faced questions about whom to involve in developing a future vision, how to formulate the vision effectively, and what vision would best serve business and family interests. These questions represented underlying strategic dilemmas, such as whether to have a select group of leaders craft the vision or to solicit input from a wider range of shareholders, and how much to allow the business vision to drive the ‘people’ vision all framed by recent unsuccessful attempts to develop a shared vision. Resolving these dilemmas successfully would help the family frame and advance its established traditions of leadership, governance, and culture within a truly shared vision that boosted unity and long-term commitment. Students working on the case will gain insights into the framework, process, and challenges associated with developing a shared vision for a complex, multigeneration family enterprise.

This study aims to investigate the impact of board independence on the cash dividend payments of family firms listed on the Borsa Istanbul (BIST) in balancing controlling families’ power to mitigate agency problems between family and minority shareholders in the post-2012 period. The authors focus on this period because Turkish authorities implemented mandatory regulations on the employment of independent directors on boards from fiscal year 2012.

The research model uses a panel dataset of 153 BIST-listed family firms over the period 2012–2017, employs alternative dependent variables and regression techniques and is applied to various sub-groups to improve robustness.

The empirical results show a strong positive effect of board independence on dividend decisions. The authors further detect that family directorship exhibits a negative effect, whereas both board size and audit committees have positive influences but chief executive officer (CEO)/duality has had no significant impact on the dividend policies of Turkish family firms since the new compulsory legal requirements in the Turkish market.

The findings suggest that independent directorship and dividend policy are complementary governance mechanisms to reduce agency conflicts between families and minority shareholders in Turkey, which is a civil law-based emerging country characterized by high family ownership concentration.

The authors present evidence that Turkish family firms’ corporate boards have evolved, to some extent, from being managerial rubber stamps to more independent boards that raise opposing voices in family decision-making. However, independent directors’ preference for dividend-induced capital market monitoring implies that their direct monitoring is less effective than it is supposed to be. This suggests a need to revise the Turkish Corporate Governance Principles to enhance independent directors’ monitoring and supervisory power.

This is thought to be the first study to provide insights on how board independence influences dividend policy in controlling agency problems in Turkish family firms since Turkish authorities introduced compulsory rules on the employment of independent directors on boards.

The purpose of this paper is to investigate the effects of family ownership on dividend payout from the perspective of agency costs in Malaysia.

Annual financial, board and family ownership data of 160 firms listed on the Bursa Malaysia are collected for the period 2005-2010. Analyses are carried out using descriptive statistics, χ2 tests, Tobit regression and three-stage least square regression analysis.

The empirical results suggest that family share ownership at the dispersed level from between 0 to 5 percent is negatively associated with dividend payout and positively associated from the 5 to 33 percent level with dividend payout. Consistent with the extant literature, the observed relationship between family share ownership and dividend payout is stronger in firms with smaller total assets (size), low debt and low-growth opportunities. Further examination of investment decisions lends support to arguments which attribute higher agency costs as a result of family ownerships.

The observed results at the different family ownership levels are attributed to the possible expropriation in family-owned firms and accordingly, to the proportional pressure by minority and other shareholders for dividend payout.

For policy makers, findings from this study could serve to justify initiatives to further strengthen the institutional and regulatory architectures that would enhance the power of minority and other shareholders of public listed firms in Malaysia.

This study contributes to the growing literature on dividend policy and family firms. Particularly, it provides further understanding of the effect of family ownership on dividend policy.

This paper aims to investigate the impact of ownership structure on dividend policy of listed firms in Turkey. Particularly, it attempts to uncover the effects of family involvement (through ownership and board representation), non-family blockholders (foreign investors, domestic financial institutions and the state) and minority shareholders on dividend decisions in the post-2003 period as it witnesses the major economic and structural reforms.

The paper uses alternative dividend policy measures (the probability of paying dividends, dividend payout ratio and dividend yield) and uses appropriate regression techniques (logit and tobit models) to test the research hypotheses, by focusing on a recent large panel dataset of 264 Istanbul Stock Exchange-listed firms (non-financial and non-utility) over a 10-year period 2003-2012.

The empirical results show that foreign and state ownership are associated with a less likelihood of paying dividends, while other ownership variables (family involvement, domestic financial institutions and minority shareholders) are insignificant in affecting the probability of paying dividends. However, all the ownership variables have a significantly negative impact on dividend payout ratio and dividend yield. Hence, the paper presents consistent evidence that increasing ownership of foreign investors and the state in general reduces the need for paying dividends in the Turkish market.

Because of the absence of empirical research on how ownership structure may affect dividend policy and the data unavailability for earlier periods in Turkey, the paper cannot make comparison between the pre-and post-2003 periods. Nevertheless, this paper can be a valuable benchmark for further research.

The paper reveals that cash dividends are not used as a monitoring mechanism by investors in Turkey and the expropriation argument through dividends for Turkish families is relatively weak. Accordingly, the findings of this paper may benefit policymakers, investors and fellow researchers, who seek useful guidance from relevant literature.

To the best of the authors’ knowledge, this paper is the first to examine the link between ownership structure and dividend policy in Turkey after the implementation of major reforms in 2003.

This research aims to examine the effect of ownership structure on dividend policy using the Indonesian context. The most common ownership structure is concentrated in the hand of family owners except in the UK and USA (La Porta et al., 1998, 2000). Family owners hold more than half of the companies in Indonesia (Carney & Child, 2013; Claessens et al., 2000). Family firms play an important role in Indonesia. Another important characteristic that emerges is the rise of government- and foreign-controlled firms in Indonesia. Thus, this research also divides ownership concentration into family firms, government-controlled and foreign-controlled firms.

Samples of this research consist of dividend announcements during 2006-2012 in Indonesian Stock Exchange. This research excluded financial data because these have characteristics that are different non-financial sectors’ characteristics. The final sample of this research consists of a 710 firm-year observation.

The result of this research shows that ownerships have a positive effect on dividend payout. This research divides the sample into family-controlled firms, government-controlled firms (GOEs) and foreign-controlled firms. This research shows that government- and foreign-controlled firms have a positive impact on dividend payout. However, family firms have a negative effect on the dividend payout. Family firms pay lower dividends because they prefer to control it themselves. Family firms earn benefit from those resources, but at the expense of minority shareholders. Thus, family firms engage in expropriation to minority shareholders.

This study focuses on ownership structure of Indonesian listed firm. This study does not analyze the impact of other corporate governance mechanism such as board structure on dividend decisions. The owner of the companies (family, government and foreign firm) has an opportunity to put their member as part of board members. However, this study does not analyze the impact of board structure on dividend decisions.

This study provides evidence that ownership concentration positively affects dividend payout. However, there is a different effect of ownership structure (family-controlled firms, GOEs and foreign-controlled firm). Government- and foreign-controlled have a positive effect; however, family-controlled firm have a negative effect on dividend payout. Therefore, this study provides evidence of the importance of ownership structure on dividend decision.

The purpose of this paper is to investigate the relationship between dividends and family involvement as well as corporate governance characteristics among Turkish public firms.

Using panel data on Turkish firms listed on the Borsa Istanbul 100 index for 2006–2014, three models are estimated. For the first two models, where the dependent variables are the dividend payout ratio and dividend yield, respectively, tobit regressions are run. The last model, which employs a dividend dummy as the dependent variable, is estimated with logistic regression.

There is a positive and concave relationship between family ownership and dividends. The existence of a family chairman reduces dividends. There is a positive association between board size and dividends and this relationship is weaker for firms with higher levels of family ownership. Finally, the ratio of independent directors on the board is negatively associated with dividends.

The findings imply that firms with substantial family ownership and active family participation in management are more likely to send a negative signal to minority shareholders by paying lower dividends. In addition, minority shareholders should pay attention to the board structure of firms in which they invest.

This study is one of the few to analyze the nonlinear relationship between family ownership and dividend payments as well as the role of family management in a developing country. Second, it investigates the role of board characteristics in explaining dividend payment decisions.

This study aims to explore the relationship between promoter share pledging and the company’s dividend payout policy in India. Furthermore, this study also analyses the moderating impact of family involvement in business on the association between share pledging and dividend payout.

A sample of 236 companies from the S&P Bombay Stock Exchange Sensitive (BSE) 500 Index (2014–2023) has been analysed through fixed-effects panel data regression. For additional testing, robustness checks include alternative measures of dividend payout and promoter share pledging, as well as alternative methodologies such as Bayesian regression. Lastly, to address potential endogeneity, instrumental variables with a two-stage least squares (IV-2SLS) methodology have been implemented.

Upholding the agency perspective, a significantly negative impact of promoter share pledging on corporate dividend payouts in India has been uncovered. Moreover, family involvement in business moderates this relationship, highlighting that the negative association between promoter share pledging and dividend payouts is more pronounced in family companies. The findings are consistent throughout the robustness testing.

The present study represents a pioneering endeavour to empirically analyse the link between promoter share pledging and dividend payouts in India. It enhances the theoretical underpinnings of the agency relationship, particularly by substantiating the existence of Type II agency conflicts between majority and minority shareholders. The findings of this research bear significant implications for investors, researchers and policymakers, particularly in light of the widespread prevalence of promoter-controlled entities in India.

The purpose of this study is to examine whether corporate social responsibility (CSR) affects dividend policy (the propensity to pay dividends as well as the dividend payout ratio) and what role family ownership plays in this regard in an emerging market.

The study uses a sample of 1,480 observations from Pakistan for the period 2010–2016 and accounts for Hackman self-selection bias and endogeneity issues using a robust regression analysis. CSR activity is measured by CSR score developed through a content analysis of firms' annual reports.

The study finds that the greater number of CSR activities increases the propensity to pay dividends, but reduces the dividend payout in dividend-paying firms. On the other hand, in family firms, the greater number CSR activities decreases the propensity to pay dividends, but increases the dividend payout in dividend-paying firms. The findings hold for a series of robustness and sensitivity checks, for example, alternative measures, specifications and estimators.

A trade-off between firms' CSR activities and dividend policy needs to be the point of concern for investors, minority shareholders and policy makers. The role of the non-executive and independent directors becomes more important, especially in the family firms where family members sitting on the boards may drive CSR activities in their own interests opportunistically. The potential opportunistic behaviour of family members warrants the need for policy reform initiatives to strengthen the protection of other stakeholders' interests.

The study highlights that family owners' efforts to preserve their socio-emotional wealth in family firms affect the relationship between CSR activities and dividend policy. Further, the relationship between CSR and dividend policy in emerging markets is different from developed markets. This study simultaneously focuses on both the propensity to pay dividends and the amount of dividend payment and documents that the implications of CSR are different for them.

Principal–principal conflicts between family shareholders and other shareholders have been investigated in emerging economies, but fewer studies have examined the effect of concentrated ownership on firm profitability and dividend payout in stakeholder-oriented systems. The purpose of this paper is to examine whether family control leads to principal–principal conflicts resulting in wealth expropriation of minority shareholders by family owners in stakeholder-oriented systems.

This study uses large listed firms of the Tokyo Stock Exchange (TSE) in Japan during 2007–2016. Using 14,991 firm year observations, the authors analyze the effect of family control on dividend payout and firm performance to test the possibility of exploitation by family owners.

The authors find that family board members do not exploit minority shareholders and rather behave as stewards of the firm. The authors also find that foreign shareholders interact with family control to increase firm profitability, suggesting that foreign shareholders enhance the role of family board members as stewards.

Existing research on principal–principal conflicts tends to examine expropriation by family board members in emerging markets. This research reveals that family board members behave like stewards in the presence of stakeholder-oriented corporate governance mechanisms. In addition, foreign shareholders strengthen the stewardship role of family controlled firms.

This study aims to investigate the impact of ownership structure and board characteristics on dividend policy in the listed Turkish firms between 2013 and 2019.

This study uses the probability of paying dividends, dividend payout ratio and dividend yield measures. The suitable regression procedures (logit, probit and Tobit models) are used to examine the research hypotheses by focusing on a panel data set drawn from the Borsa Istanbul (BIST) 100 index, excluding financial and utility firms.

The empirical findings indicate that institutional and concentrated ownerships are significant and positively associated with dividend payouts, whereas family ownership does not influence dividend policy. On the other end, board size is positive, while chief executive officer duality is negatively related to dividend policy. Additionally, the female directors and board independence are insignificant in influencing firms to pay high dividends.

Future researchers can validate this paper’s findings by considering the stock dividends as well. Additionally, future researchers may investigate the relationship between these constructs by extending the sample size of firms listed on BIST or in other emerging markets.

This study’s findings may serve policymakers, regulators, investors and academic researchers to get valuable guidance from relevant literature. The Turkish firms may improve dividend policy by implementing the regulatory framework introduced by the Capital Markets Law in 2012 for effective monitoring and protecting the minority shareholders’ rights. The controlling shareholders may alleviate principal-principal conflicts by ensuring the independence of directors and increasing the number of female directors according to the critical mass of at least 30% of board members.

This study contributes to agency theory and signaling theory by considering ownership structure and board attributes among Turkish firms related to dividend payments.