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CORPORATE GOVERNANCE MECHANISMS IN FAMILY FIRMS – A SOCIOEMOTIONAL WEALTH PERSPECTIVE
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Patrick Ulrich 
, Alexandra Fibitz
Abstract
This paper examines how German family firms differ in the usage of corporate governance mechanisms in comparison to non-family firms. We give an overview about the relation of corporate governance and family firms, and deliver hypotheses from an empirical study. The study was conducted in 2017 as a written survey and 86 questionnaires could be used for statistical analysis. Based on socioemotional wealth (SEW) theory, we find that with a higher extent of family influence in the firm, less corporate governance instruments are used. Furthermore, corporate governance is used primarily to prevent stakeholder confidence in the long-run. However, a formalization of corporate governance mechanisms does not take place. We draw implications for more corporate governance formalization and awareness in family firms both for theory and practice.
Keywords: Corporate Governance, Family Firms, Socioemotional Wealth, Formalization Mechanism, Professionalization
JEL Classification: G30, G39, M00
Received: 26.01.2018
Accepted: 14.03.2018
Published online: 20.03.2018
How to cite this paper: Ulrich, P., & Fibitz, A. (2018). Corporate governance mechanisms in family firms – A socioemotional wealth perspective. Corporate Ownership & Control, 15(3), 32-46. https://doi.org/10.22495/cocv15i3art3
