Abstract
Ownership is usually a system assumed implicit in the dynamics of management of enterprises, but it actually deserves more attention than a periodic control in the yearly general shareholder´s assembly. Empowerment of owners is required given the magnitude of decisions they make in terms of capital and business purpose, and not just delegate it to the Board or the CEO. Despite the relevance of the topic, there is a gap in the literature of corporate governance in family business from the ownership dimension. This longitudinal study uses a quantitative approach with an explanatory scope that pretends to answer the question: Do shareholders corporate governance practices and family control influence financial performance on businesses? 104 public companies were analyzed and 36.5% of them were identified as family businesses, using data from National Registry of Values and Issuers, which also responded the country Code 'survey of Colombia in the period 2008 to 2014. Data was processed with student's t test and Random Effects analysis that is a panel data technique. Results shown that family and non-family businesses have significant differences in ownership governance practices, but no significant relationship were identified between corporate governance practices of shareholders or family control with financial performance. Keywords: shareholders, ownership, corporate governance, practices, family business, financial performance JEL Classifications: G30, G34, L25 DOI: https://doi.org/10.32479/ijefi.9170
Highlights
IntroductionBusinesses around the world are a large and important component of the economy, though often are associated with small and medium enterprises (SMEs), they come to represent in many countries between 70% and 95% of all companies, which represent a similar contribution to the global GDP and between 50% and 80% of all jobs (European Family Businesses, 2012)
Businesses around the world are a large and important component of the economy, though often are associated with small and medium enterprises (SMEs), they come to represent in many countries between 70% and 95% of all companies, which represent a similar contribution to the global GDP and between 50% and 80% of all jobs (European Family Businesses, 2012).Their particular behavior has led many authors to study family businesses in order to identify what makes them different
Nor should it be forgotten that one of the biggest problems found in family businesses in developing countries is that the owners do not fully exercise their rights and duties, either because there is a culture that does not protect minority shareholders, or because due to lack of knowledge and skills, they prefer to delegate to the board of directors or even to management a large part of their functions
Summary
Businesses around the world are a large and important component of the economy, though often are associated with SMEs, they come to represent in many countries between 70% and 95% of all companies, which represent a similar contribution to the global GDP and between 50% and 80% of all jobs (European Family Businesses, 2012). Their particular behavior has led many authors to study family businesses in order to identify what makes them different. This study focuses on corporate governance practices at the ownership level, because the owners are the final decision-making body of enterprises through the general shareholder’s assembly. A family business that recognizes the ownership as an important issue, brings together shareholders to work on a common vision, develops a strategy to boost growth, agreed risk levels, generates liquidity and promotes profitability, while foreseeing contingencies and shielding against them through legal structures and consensual policies
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