Board process attributes and company performance of family‐owned businesses in Turkey

Abstract

PurposeThis paper aims to investigate the relationship between board process attributes and company performance of family‐owned companies within an emerging country context.Design/methodology/approachA survey questionnaire was developed and conducted on a sample of privately‐held Turkish companies where a total of 386 usable questionnaires were returned. From the original data set a sub‐sample of 266 firms with majority family ownership was created. Based on the extant literature, a set of 18 directors' collective attributes and 15 directors' individual attributes were identified as potentially relevant for company performance. Relying on the perceptions of the respondents, multiple subjective measures of company performance were adopted.FindingsCompany performance is found to be positively related to the directors' collective and individual attributes which are associated with access to information, effectiveness of board, observance of fiduciary responsibility and performance evaluation.Practical implicationsThe essential implication of the study for establishing a desirable board climate is the necessity of having a keen focus on information. Sticking to fiduciary responsibility and application of performance evaluations are also indispensable attributes of high performance companies. These attitudes all combined seem to culminate in effective board process.Originality/valueWhile the subject of corporate governance is gaining an increasing attention from both academic and business circles, there is a dearth of research on board process attributes and their impact on company performance. This paper, therefore, aims to fill this lacuna by examining the relationship between board process attributes and company performance within a big emerging country context.