Family Business Governance Structures : Incidence and Effects

Abstract

The research focused on governance systems in family businesses and was based on survey data from 241 organizations. Analyses found 25 percent of the family busi-nesses had no structured system and 75 percent had governance systems comprised of one or more of the following: boards of directors, advisory boards, and/or family meetings. Types of systems were related to desirable outcomes identified as revenue generation, family business continuity, and family/business planning. A key finding was that family businesses that had some type of a formal structure had a higher level of planning that led to higher revenues. The existence of either a board of directors or an advisory board was positively related to transitioning businesses to later genera-tions. Implications for family businesses are discussed.