Freeing the shackles of family business ownership

Copyright © 2002 Family Firm Institute, Inc.Ownership and management succession are recognized as defining processes for family businesses worldwide. Through the generations, as the family tree spreads, shareholdings become more dispersed, with no guarantee that all family shareholders will have the same degree of commitment to, and interest in, the family business. This paper discusses factors influencing the outcome of external and internal challenges to ownership of two interrelated Australian family businesses—one in its fifth generation, the other in its third. It concludes with guidelines to allow for effective and timely ownership transfer for those wishing to realize capital or retain control of their inherited investment.Jill Thoma

Family ownership, board independence and R&D investment

[[abstract]]Family influence is central in Asian countries; however, little research exists regarding the effects of family ownership and corporate governance on corporate investment decisions. This article examines the relationships among family ownership, board independence, and R&D investment using a sampling of Taiwanese firms. The finding of the negative family ownership—R&D investment relationship suggests that family ownership may discourage risky long-term R&D investment. Such a finding may also suggest that firms with high family ownership may use R&D investment more efficiently and thus need less R&D in relation to firms with low family ownership. In addition, the interaction of family ownership and CEO duality/independent director ratio is negatively/positively related to R&D investment, suggesting that firms with high family ownership may increase R&D investment when the CEO—chair roles are separated or when more independent outsiders are included in the board

Promoting family: A contingency model of family business succession

Succession is a challenge to family businesses for a number of reasons, including the need to address the issue of intergenerational handover. This article focuses on one aspect of succession in family business by investigating when family members are preferred as successors. Results from 860 family businesses indicate that specific (tacit) knowledge characteristics combined with a favorable transaction atmosphere, in certain contexts, make a family member the most suitable successor. A conceptual model is presented that outlines when inside-family succession is preferred