Does one size fit all? An empirical investigation of board structure on family firms' financial performance

Nirosha Wellalage (), Stuart Locke and Francis Scrimgeour

Afro-Asian Journal of Finance and Accounting, 2012, vol. 3, issue 2, 182-194

Abstract: The current study investigates the relationship between family firm board structure and financial performance in Sri Lanka. This study uses five years (2006-2010) of data from 65 family firms listed on the Colombo Stock Exchange (CSE). In order to investigate the impact of board structure on family firm financial performance, a dynamic panel generalised method of moment estimation is applied. The results show that board openness to non-family members, board diversity and insider ownership decrease family firms' financial performance. Consequently, this study suggests the corporate governance framework needs to be tailored to a family business structure as 'one size does not fit all'.

Keywords: family firms; board structure; corporate governance; emerging markets; family businesses; financial performance; Sri Lanka; non-family board members; board diversity; insider ownership. (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ids:afasfa:v:3:y:2012:i:2:p:182-194

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