Corporate governance and board conflict solution: The case of Lebanese family healthcare businesses

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Abstract

This study examines the intricate relationship between corporate governance mechanisms and the performance of family-owned hospitals in Lebanon. Specifically, it examined the impact of various governance factors, including board size, independence, duality, meeting frequency, and ownership structure, on the financial performance of these hospitals. By employing agency theory as the conceptual framework and qualitative methodology, which involves interviews with managers from three distinct hospitals in Lebanon, this study sheds light on the dynamics of conflicts between shareholders and managers within the context of family-owned hospitals. This study also explores how corporate governance mechanisms can effectively mitigate these conflicts and enhance shareholder value. The significance of this study lies in its contribution to the understanding of corporate governance practices within the Lebanese healthcare sector, offering valuable insights that extend to developing countries across the Middle East and North Africa (MENA) region. These findings suggest that fostering a more autonomous board structure can play a pivotal role in controlling top management and aligning the interests of shareholders and managers within the Lebanese healthcare landscape. Through a nuanced exploration of governance dynamics and their implications for financial performance, this study underscores the importance of robust governance frameworks for ensuring the sustainable success of family-owned hospitals. Ultimately, by elucidating the mechanisms by which governance practices influence organizational outcomes, this study offers practical implications for healthcare practitioners, policymakers, and stakeholders seeking to enhance governance effectiveness and performance in similar contexts.

Keywords: Duality, Dependency, Ownership, Board of Directors, CEO, Board Size, Meeting Frequency

Authors’ individual contribution: Conceptualization — K.S.; Methodology — K.S.; Investigation — C.B.; Writing — Original Draft — K.S. and N.N.; Writing — Review & Editing — K.S., N.N., and C.B.; Supervision — N.N. and C.B.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G30, G31, G38

Received: 30.03.2024
Accepted: 07.06.2024
Published online: 11.06.2024

How to cite this paper: Shatila, K., Nigam, N., & Benetti, C. (2024). Corporate governance and board conflict solution: The case of Lebanese family healthcare businesses. Corporate Ownership & Control, 21(2), 198–208. https://doi.org/10.22495/cocv21i2art16