Search results

1 – 10 of over 12000
Article
Publication date: 11 November 2019

María Sacristán-Navarro and Laura Cabeza-García

The purpose of this paper is to describe internal corporate governance mechanisms in family firms as well as conflicts that may arise among shareholders and family members in the…

Abstract

Purpose

The purpose of this paper is to describe internal corporate governance mechanisms in family firms as well as conflicts that may arise among shareholders and family members in the absence of specific corporate governance mechanisms.

Design/methodology/approach

After presenting theoretical concepts, the authors study the case of Spanish family firm El Corte Inglés to understand some of the corporate governance difficulties the company has experienced over the past few years.

Findings

This case illustrates how corporate governance problems can arise because the right mechanisms have not been used, leading to conflicts among family members, valuation problems and power struggles.

Practical implications

There is a need for family firms to employ suitable corporate governance mechanisms as governance complexity increases.

Originality/value

This study aims to contribute to the understanding of corporate governance problems among family members and their possible solutions.

Details

Journal of Family Business Management, vol. 10 no. 2
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 3 January 2018

Vincenzo Scafarto and Panagiotis Dimitropoulos

The main purpose of this paper is to examine the relationship between human capital investments and financial performance in the professional football industry. The authors…

2192

Abstract

Purpose

The main purpose of this paper is to examine the relationship between human capital investments and financial performance in the professional football industry. The authors examine this association by controlling for internal (club-level) mechanisms of governance. Specifically, as they deal with a context of highly concentrated ownership and familial control of football clubs, they posit that the degree of family board representation and a dual leadership structure exert a moderating effect on the decision to spend on playing talent.

Design/methodology/approach

The empirical analysis employs a fixed-effect econometric model on a panel data set of 16 Italian football clubs that spans a nine-year time period ending up with 144 firm-year observations.

Findings

The main novel finding of this investigation is that clubs with CEO duality and a high degree of family board representation manage to profit from investments in player contracts as opposed to clubs which lack these governance mechanisms.

Research limitations/implications

A clear implication is that the presence of corporate governance mechanisms at club level may be value-enhancing. In terms of policy direction, the finding makes the case that regulatory bodies should consider the imposition of governance mechanisms at club level as a means to promote actual financial discipline and a further ally to current regulations that are restricted to monitoring processes tied to accounting data.

Originality/value

This study attempts to explain the financial outcomes of player investments by combining insights from the mainstream governance and family business literature. Prior works in the field are restricted to testing the direct relation between player investments and performance, but fail to consider the potential moderators of this association.

Details

Corporate Governance: The International Journal of Business in Society, vol. 18 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 15 March 2018

Vas Taras, Esra Memili, Zhonghui Wang and Henrik Harms

This study aims to investigate the effects of family involvement in corporations on firm performance. It remains unclear whether family-owned companies, or companies with other…

Abstract

Purpose

This study aims to investigate the effects of family involvement in corporations on firm performance. It remains unclear whether family-owned companies, or companies with other forms of family involvement in the corporate governance, perform better than firms with no family involvement. Furthermore, the study focuses on family involvement in publicly traded firms, which are different from private family firms. Hence, knowledge about family firms will be enriched through a closer look at the publicly traded family firms and shed further light onto the heterogeneity among family firms.

Design/methodology/approach

The present study uses a meta-analysis of the extant research on family involvement and publicly traded family firm performance. The authors synthesize past research, identify and reconcile mixed findings and expand the understanding of the phenomenon.

Findings

Involvement of the founding family members in firm governance tends to improve firm performance, albeit the effect is rather weak. However, the effect varies greatly depending on the type of family involvement and the measure of performance. The authors also identify regional differences, as well as variations by the firm size and study design. Furthermore, under-researched areas are identified for future research.

Practical implications

The results of the study would be useful in guiding organizational design and investment decisions.

Originality/value

By using the meta-analytic approach, the present study provides a comprehensive review of the empirical evidence available on the issue so far. Most importantly, the authors were able to conduct a series of tests to assess the moderating effects of a number of factors that could not be evaluated in any individual study in the meta-analytic database.

Article
Publication date: 27 January 2023

Arshad Hasan, Zahid Riaz and Franklin Nakpodia

This study aims to investigate the impact of family management and ownership structure, including foreign ownership and business group ownership, on corporate performance.

Abstract

Purpose

This study aims to investigate the impact of family management and ownership structure, including foreign ownership and business group ownership, on corporate performance.

Design/methodology/approach

Using an agency perspective and a quantitative research methodology, this study examines listed firms in Pakistan from 2009 to 2018.

Findings

The results suggest that family management and concentrated leadership constrain, whereas family leadership, foreign ownership and group ownership strengthen monitoring effectiveness and corporate performance. These findings imply that the shareholder governance logic offers optimal solutions in an emerging economy, as relational governance may activate agency problems.

Originality/value

The findings are consistent with the relevance of relational governance mechanisms in the form of family leadership. However, the results suggest that emerging economies require a hybrid governance model to address their unique agency problems, thereby underlining context relevance in corporate governance scholarship. Furthermore, this research adopts a thick view of institutions to clarify institutional embeddedness and corporate governance contextuality in an emerging economy.

Details

Corporate Governance: The International Journal of Business in Society, vol. 23 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 10 December 2018

Zaid Saidat, Mauricio Silva and Claire Seaman

The purpose of this paper is to attempt to fill a research gap in the relationship between corporate governance mechanisms and financial performance of family and non-family

3442

Abstract

Purpose

The purpose of this paper is to attempt to fill a research gap in the relationship between corporate governance mechanisms and financial performance of family and non-family firms’ by using a sample of non-financial firms listed on Amman Stock Exchange (ASE) for the period 2009–2015.

Design/methodology/approach

This research employs a quantitative method using data that include corporate governance mechanisms, firm characteristics and financial ratios of a sample of Jordanian listed firms in the ASE over the period 2009–2015. The sample covers all companies that have been part of the ASE during the period including both family and non-family firms, part of total of 228 companies listed on the ASE as of 31 December 2015. The study used accounting-based measures such as return on asset (ROA) and market-based measures such as Tobin’s Q as proxies for corporate financial performance.

Findings

The study found that board size both in term of Tobin’s Q and ROA has a negative relationship with the performance of family firms. In non-family firms, there is no systematic relationship with corporate performance. There is a strong relationship between corporate performance and independent directors in non-family firms. In addition, the authors found some evidence for a relationship between performance and independent directors in family firms. Also, results indicated that ownership concentration has an insignificant correlation with corporate performance and in family firms has a negative and significant correlation with Tobin’s Q. There is a significant relationship between local investors’ ownership and corporate performance as measured by Tobin’s Q in family and non-family firms.

Originality/value

Studies concerned with the effect of corporate governance on firm performance remains comparatively under-researched in Middle East countries and Jordan in particular (Najib, 2007; Omet, 2004; Marashdeh, 2014). Moreover, studies investigating whether the practice of corporate governance has the same impact on family firm performance are still relatively less well known than those when ownership is distributed widely (non-family firms) (Jaggi, Leung and Gul, 2009; Prencipe and Bar-Yosef, 2011). This research is seeking to fill this current gap in Jordan, which is one of the developing countries with an emerging economics that are very poorly represented in the literature.

Details

Journal of Family Business Management, vol. 9 no. 1
Type: Research Article
ISSN: 2043-6238

Keywords

Open Access
Book part
Publication date: 14 December 2023

Chris Graves, Donella Caspersz and Jill Thomas

Prior family business research has been dominated by an agency theory perspective, narrow definitions of what constitutes family wealth, and a preoccupation with business…

Abstract

Prior family business research has been dominated by an agency theory perspective, narrow definitions of what constitutes family wealth, and a preoccupation with business governance mechanisms to the exclusion of family governance mechanisms. This chapter presents the findings of examining the role of a broader range of governance mechanisms (for the business; for the family) in achieving more comprehensive wealth (economic and non-economic) family business goals in the Australian context. Based on survey responses from around 400 family businesses, the findings from this study show that both family and business governance mechanisms contribute significantly to achieving both the business’s financial performance and the achievement of family-centered goals that are important to the owning family. The results also suggest that the relationship between governance and performance in the family business context is much more complex than that acknowledged in prior research and has implications for both future research and practice.

Book part
Publication date: 9 July 2018

Philip M. Beattie

Despite being the dominant form of business globally, it is widely recognised that research focused on the governance of small family-owned entities has been largely overlooked…

Abstract

Despite being the dominant form of business globally, it is widely recognised that research focused on the governance of small family-owned entities has been largely overlooked. The benefits of sound governance practices are deemed salutary for small business prosperity; however, these enterprises are confronted with significant governance issues and unique concerns of their own. One particular issue concerns the compliance costs of governance for family-owned businesses and the extent to which the regulatory environment actually encourages an evolvement towards an improvement in governance practices in smaller businesses. Reconciling decision speed, flexibility and entrepreneurial innovation to necessary enhanced governance practices and procedures remains problematic. It is argued that a proper balance between the costs and benefits of proper governance codes and structures for smaller firms can only be achieved with a strong emphasis on flexibility to take account of myriad types of governance requirements of firms. This would entail the development of an evolutionary view of corporate governance implementation, one which mirrors the process of delegation of the entrepreneurial function to company boards and management. This would lend support to the view that there is no universal ‘best way’ for all firms at all stages of the business life cycle. In this respect, the application of the principles of subsidiarity and incentives plays an important role.

Details

Governance and Regulations’ Contemporary Issues
Type: Book
ISBN: 978-1-78743-815-6

Keywords

Book part
Publication date: 1 November 2018

Zhongzhi (Lawrence) He, Martin Kusy, Deepak Singh and Samir Trabelsi

The Canadian mutual fund setting is unique in that two governance mechanismscorporate and trust – coexist. This study empirically examines the impact of each mechanism on fund…

Abstract

The Canadian mutual fund setting is unique in that two governance mechanismscorporate and trust – coexist. This study empirically examines the impact of each mechanism on fund fees and performance. We find that corporate class funds charge higher fees but deliver superior fee-adjusted returns than trust funds. We then analyze the impact of various board characteristics on fees and performance for corporate class funds. We find that a board with smaller size, CEO duality, and a higher percentage of independent directors is more likely to charge lower fees. In addition, smaller boards are strongly associated with higher fee-adjusted performance. Our study supports agency theory over stewardship theory and provides valuable guidelines for Canadian investors and regulatory agencies.

Details

International Corporate Governance and Regulation
Type: Book
ISBN: 978-1-78756-536-4

Keywords

Article
Publication date: 5 October 2018

Atreya Chakraborty, Lucia Gao and Shahbaz Sheikh

The purpose of this paper is to investigate if there is a differential effect of corporate governance mechanisms on firm risk in Canadian companies cross-listed on US markets and…

Abstract

Purpose

The purpose of this paper is to investigate if there is a differential effect of corporate governance mechanisms on firm risk in Canadian companies cross-listed on US markets and Canadian companies not cross-listed (Canadian only companies).

Design/methodology/approach

Using a sample comprised of all Canadian companies included in the S&P/TSX Composite Index for the period 2009–2014, this study applies OLS and fixed effect regressions to investigate the effect of corporate governance mechanisms on firm risk. Interaction variables between governance mechanisms and the cross-listing status are used to examine if this effect is different for cross-listed firms.

Findings

Results indicate that the effect of board characteristics such as size, independence and proportion of female directors remains the same in both cross-listed and not cross-listed firms. CEO duality and insider equity ownership impact firm risk only in cross-listed companies, while institutional shareholdings, environmental, social and governance disclosure and family control affect firm risk in Canadian only firms. Overall, the empirical results indicate that some governance mechanisms impact firm risk only in firms that cross-list, while others are well-suited for Canadian only firms.

Practical implications

This study suggests that some of the differences between Canadian companies that cross-list and the Canadian companies that do not cross-list in US stock markets may change the impact of governance mechanisms on firm risk. Therefore, these findings have important implications for the design of governance mechanisms in Canadian firms. Since some of these differences are common to other economies, the conclusions can be extended to companies in other countries with similar governance structures.

Originality/value

Although previous studies have investigated the effect of governance mechanism on firm risk, this is the first paper that studies the differential effect for companies that cross-list in US markets. Specifically, differences in the ownership structure, firm control and in the regulatory and institutional environment, may explain this differential effect. Unlike most of the previous studies that focus on the effect of individual governance mechanisms, this study uses several mechanisms and their interactions at the same time.

Details

Management Decision, vol. 57 no. 10
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 21 November 2016

Tulay Ilhan Nas and Ozan Kalaycioglu

This study aims to understand the antecedents of export performance at the firm level. Building on agency theory but taking into account emerging market settings and institutional…

2778

Abstract

Purpose

This study aims to understand the antecedents of export performance at the firm level. Building on agency theory but taking into account emerging market settings and institutional differences, the authors investigate how the board composition determines the export competitiveness of the firms operating in an emerging country from the point of view of corporate governance mechanisms.

Design/methodology/approach

Using data from 221 exporting firms for four years (2007-2010), the authors find that there is a significantly positive relationship between board size and all measures of export performance, while a higher presence of outside directors on the board is negatively associated with export performance, consistently with expectations. The separation of chairman of board of directors and chief executive officer (CEO) positions has significantly positive impact on export performance. On the other hand, the authors find no support for the position that inside director professional representation neither reduce nor increase all measures of export performance of firms. In other words, the convergence with Western practices and consistently with agency theory’s claims is evident for both board size and CEO duality. However, the effects of inside professional and outside directors are no consistent with agency theorists’ expectations.

Findings

Using data from 221 exporting firms for four years (2007-2010), the authors find that there is a significantly positive relationship between board size and all measures of export performance, while a higher presence of outside directors on the board is a negatively associated with export performance, consistently with expectations. The separation of chairman of board of directors and CEO positions has significantly positive impact on export performance. On the other hand, the authors find no support for the position that inside director professional representation neither reduce nor increase all measures of export performance of firms. In other words, the convergence with Western practices and consistently with agency theory’s claims is evident for both board size and CEO duality. However, the effects of inside professional and outside directors are no consistent with agency theorists’ expectations.

Research limitations/implications

Export performance is one of the most widely researched areas within international marketing research but least reached topic of management. However, exporting continues to be an important mode of internationalization for multinational companies, especially operating an emerging economy. This study is one of the first studies on the impact of governance factors such as board structure on only export performance rather than overall (firm) performance in light of international management. In other words, the study of the determinants of exports in the context of an emerging economy is an important contribution to the literature, given that our understanding of how the board composition determines the export competitiveness from the point of view of firms operating in an emerging country such as Turkey. Moreover, this research investigates this relationship at objective export performance dimensions using primary data set from listed and non-listed export firms.

Practical implications

The current study offered in-depth information to multinational companies that aim to gain a competitive exporting advantage in Turkey. Further, the results of this study give managers an opportunity to see the reasons behind the success of the exporting firms from the point of view of corporate governance mechanism.

Originality/value

In this paper, the authors contribute to this recent stream of research providing evidence on the effects of governance mechanism on the export performance from the point of view of emerging countries. Building on agency theory but taking into account emerging market settings and institutional differences, and international management, the authors provide a new framework that models the linkages between board composition and export performance. This work helps us to gain a deeper understanding of how board dynamics contribute to the internalization of firms. Research in this area has been sparse, although some studies have linked governance with export intensity. In this effort, the authors differentiate from previous studies in several ways.

Details

Management Research Review, vol. 39 no. 11
Type: Research Article
ISSN: 2040-8269

Keywords

1 – 10 of over 12000