The aim of this thesis is to deepen understanding of how agency conflict arises in the governance of family businesses. The constructs were proposed arising from empirical research, involving four case studies of different Brazilian family-owned companies, which were analysed inductively. Next, data from the literature was used to validate those constructs, which became part of the proposed Family Business Agency Conflict Model and to suggest articulated hypotheses.
This model identifies factors that can potentially increase, and those which can mitigate, tensions between the actors involved representing family, ownership and management within family-owned firms. It was subsequently tested through a survey of 152 family-owned firms of varying size, which belonged to different economic sectors and regions of Brazil. Structural equation modelling was used to test the empirical validity of the model, with reference to hypotheses concerning the variables which influence agency conflict. The model was found to predict 38 per cent of the variance in agency conflict.
Four variables were found which explain directly the agency conflict in family businesses: strategic alignment, social alignment, trust and impartiality. Therefore, the findings of this research besides focusing on the usual procedural aspects of governance, such as disclosure and control, include behavioural elements which constitute a step ahead in the study of corporate governance in family business
