Print ISSN: 2204-1990

Online ISSN: 1323-6903

Keywords : Family Firms

Analyzing the Role of Board Independence towards Corporate Cash Holding: Evidence from Listed Family Firms of Emerging Economy


Journal of Contemporary Issues in Business and Government, 2021, Volume 27, Issue 3, Pages 1360-1369
DOI: 10.47750/cibg.2021.27.03.182

Family businesses are a valuable and well-known corporate name all over the world. However, controlling families have a clear incentive to obtain private benefits via asset expropriation from minority owners and to take activities that diminish the firms' value especially in emerging economies. A strong governance structure protects against these practices and affects long-term success by lowering them. This study adds to this scope by examining the effect of board independence, board size, leverage, dividend distribution, and company size on cash holding in the case of Pakistani listed family firms. Secondary data of sample of 212 family listed firm for the period of 2010-2017 from published annual reports and corporate governance reports are used. The static and dynamic models: fixed effect (F.E.), random effect (RE), and generalized method of moment (GMM) are the critical tools of evaluation in this study. Results show that board independence negatively affects cash holding, indicating that governance plays an active part in family businesses, whereas board size positively impacts cash holding, and demonstrating inefficient governance. Finally, study has policy guidelines for shareholders, and all other stakeholders.

The Linkage between Corporate Board Independence and Firm Performance: Empirical Evidence from the Family Firms in Pakistan

Wu MengYun; Um-e- Habiba; Muhammad Mudassar Anwar; Muhammad Imad-ud-din Akbar; Muhammad Husnain

Journal of Contemporary Issues in Business and Government, 2021, Volume 27, Issue 2, Pages 5830-5842
DOI: 10.47750/cibg.2021.27.02.586

Everywhere around the globe, family companies are a prominent and quite sound identity. Dominant families have a solid motive for extracting personal advantages through minority shareholder resource exploitation and indulging in lessening the shareholders' wealth, especiallyin developing countries. An effective governance system guards against these activities while still influencing long-term results by eliminating these. This analysis broadens this focus by exploring the impact of independent directors, board scale, leverage, dividend delivery, and firm size on financial performance in Pakistani listed family-owned businesses. Secondary data from released annual reports and governance practices reports was used to analyze 212 family-owned firms from 2010 to 2017. Throughout this analysis, the static or dynamic models: fixed - effects (FE), random effect (RE), and generalized form of the moment (GMM) are important measurement methods. The findings indicate that board independence positively impacts firm financial efficiency, suggesting that governance is successful in family businesses. In contrast, board size has a negative impact on the performance of a firm, offering ineffective governance. Finally, the study includes governance suggestions for lenders as well as all other stakeholders

The effect of planning managerial and ownership transfers on successful succession in family-owned business: A Tunisian Case


Journal of Contemporary Issues in Business and Government, 2021, Volume 27, Issue 1, Pages 1805-1827

Research on both planning managerial and ownership transfers in family businesses is almost nonexistent. The purpose of this study is to shed light on the importance of managerial and ownership planning in the succession process and its significance to sustain firm performance in the long run. The research has used a qualitative unique case study. Semi-structured interviews were conducted with two effective successors in family-owned businesses. Event history analysis method is used to study the speeches. This research shows that both managerial and ownership planning are interrelated strategic issues that merit thought and action. However, many business owners make the mistake of creating one plan without accounting for the other. Management succession planning should include development, training and support of successors. Furthermore, findings also showed that the existence of internal governance mechanisms reduces conflicts and therefore has a positive effect on succession in family-owned business.