When Do Shareholder Agreements Add Value? Mitigating Superprincipal-Agency Conflicts in Family Firms

Peter Jaskiewicz, François Belot, James G. Combs, Emmanuel Boutron and Céline Barrédy

Entrepreneurship Theory and Practice, 2024, vol. 48, issue 6, 1451-1494

Abstract: Researchers are divided on whether shareholder agreements (SAs) improve or hurt firm value. We offer family firms as a context where SAs add value and explain why; SAs limit “superprincipal†agency conflicts between family owners and other family members. A panel of French firms and a second study of French Initial Public Offerings show shareholders value SAs more in family than in nonfamily firms. Among family firms, SAs add greater value when weak governance undermines family owners’ resistance to other family members’ demands. Our study helps reconcile competing theory about SAs and distinguishes superprincipal conflicts from other family-firm agency problems.

Keywords: family business; manuscripts: specialty areas; agency; theory; quantitative; research methods (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:48:y:2024:i:6:p:1451-1494

DOI: 10.1177/10422587241238006

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