Corporate Governance and Financial Performance: Family Firms vs. Non-Family Firms

Audney Mashele (), Marise Mouton and Lydia Pelcher
Additional contact information
Audney Mashele: Department of Accountancy, School of Accounting, College of Business and Economics, University of Johannesburg, Auckland Park Campus, Johannesburg 2092, South Africa
Marise Mouton: Department of Commercial Accounting, School of Accounting, College of Business and Economics, University of Johannesburg, Soweto Campus, Johannesburg 1809, South Africa
Lydia Pelcher: Department of Commercial Accounting, School of Accounting, College of Business and Economics, University of Johannesburg, Soweto Campus, Johannesburg 1809, South Africa

JRFM, 2024, vol. 17, issue 10, 1-18

Abstract: The essence of a family business captures the distinguishing factors differentiating them from non-family businesses. Among these factors, the constructs of family firms’ managing and governance elements are perceived differently by non-family firms. This is especially important in a developing country such as South Africa (SA) with many governance challenges. The objectives of this study were, first, to identify relationships among financial performance, corporate governance, and ownership concentrations of listed family and non-family businesses in SA. Next, a comparison was made between the different ownership structures. Secondary data were collected using purposive sampling from 2015 to 2019. These data were analysed using panel data analysis and descriptive statistics. The results show that family firms place a greater emphasis on ownership concentration, board size, and board gender diversity, which have a significant relationship with financial performance. Only board size was significant to financial performance for non-family firms. The results indicate that family businesses should appoint female family members as directors on their boards, given the significance of gender-diverse boards for financial performance. Non-family businesses should also consider having smaller boards. Theoretically, this study expands on the literature regarding family businesses in SA. However, the findings cannot be generalised due to a single industry being selected. This study should be replicated in different industries to compare the results.

Keywords: family business; emerging market; financial performance; board gender diversity (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/1911-8074/17/10/444/pdf (application/pdf)
https://www.mdpi.com/1911-8074/17/10/444/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:17:y:2024:i:10:p:444-:d:1490548

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().