Groupthink in the Board of Family Firms: The Case of Institutional Investment
Zulfiquer Ali Haider,
Douglas J. Cumming and
Zhenyu Wu
Entrepreneurship Theory and Practice, 2025, vol. 49, issue 3, 916-958
Abstract:
This study explores groupthink on the boards of family firms. We conjecture that institutional investors, in the face of principal–principal agency issues, are discouraged by groupthink and consequently invest less in family firms. Appropriate corporate governance in the form of greater board diversity, lower director tenure, busier boards, more financial disclosure, and bigger shareholder voice should help in alleviating these institutional investor concerns. We examine a sample of firms from the S&P 500 and find evidence consistent with these propositions. Also, we provide evidence that board generational heterogeneity in family firms exacerbates groupthink.
Keywords: groupthink; institutional investors; family firm heterogeneity; board directors; strategic leadership (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:
Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/10422587241302702 (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:sae:entthe:v:49:y:2025:i:3:p:916-958
DOI: 10.1177/10422587241302702
Access Statistics for this article
More articles in Entrepreneurship Theory and Practice
Bibliographic data for series maintained by SAGE Publications ().