The Impact of Board Independence on Firm Performance in Family-Owned Businesses
Added on 2019-09-30
20 Pages7100 Words274 Views
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1The role of corporate governance onthe performance of family businesses:Evidence from Hong Kong
2AbstractThe study highlighted that the corporate governance is mainly one of the mostrecognized as one of the vital implications in building the marketplace confidence aswell as attracting the positive investors in the company particularly and the economyin general. However, it can be said that promoting good corporate governancestandards is also considered to be quite vital in terms of attracting investment capital,developing the performance of a company and reducing the risk. Family businessesare growing all over the world, both in developed and developing countries. In Asia,75% of listed companies are family-owned. As a result of the family business in theglobal economy to make a great contribution, so the governance of the familybusiness has been more and more attention, for which many scholars have made alot of research, focus on its characteristics, and determine how these characteristicsimpact the performance of the family business.
3Table of contentsAbstract.........................................................................................................................2Introduction...................................................................................................................4Literature review...........................................................................................................5Family business........................................................................................................5Corporate governance..............................................................................................6Family organizations In Hong Kong..........................................................................9Corporate governance business for the family-owned business..............................9Duality.....................................................................................................................10Board size...............................................................................................................11Tenure of the CEO..................................................................................................11Board independence...............................................................................................11Corporate governance structures...........................................................................11The need for corporate governance in the family business....................................12The link between governance and the performance of the family business..........12Corporate governance in Hong Kong.....................................................................13Research design and Methodology............................................................................14Conclusion and recommendations.............................................................................15References.................................................................................................................17
4IntroductionThe family business plan mainly generates a governance structure for the familybusiness as well as the family. The entire study will be highlighting the role ofcorporate governance on the family business performance in Hong Kong. Thecorporate governance is mainly one of the most recognized as one of the vitalimplications in building the marketplace confidence as well as attracting the positiveinvestors in the company particularly and the economy in general (Brenes, Madrigaland Requena, 2011). However, it can be said that promoting good corporategovernance standards is also considered to be quite vital in terms of attractinginvestment capital, developing the performance of a company and reducing the risk.The family business is, however, a firm that is managed and owned by a single rootin the family. The most critical factors that tend to lead towards the problems in thefamily business are the equity and the succession control. The main concern of thefamilies with regards to the business continuity has to mainly do with who will betaking the role of the entrepreneur. In terms of developing the global economy thefamily business plays the most important role. Family businesses are enhancing allover the world, both in developed and developing countries. In Asia, 75% of listedcompanies are family-owned. As a result of the family business in the globaleconomy to make a great contribution, so the governance of the family business hasbeen more and more attention, for which many scholars have made a lot ofresearch, focus on its characteristics, and determine how these characteristicsimpact the performance of the family business (Ibrahim and Samad, 2011). However, this main aim of this particular is to find the relationship betweencorporate governance (CG) as well as the family business performance (FBP). Inview of the cultural and economic differences between countries and regions, thispaper only uses listed companies in Hong Kong to study this proposal. The study willbe including the information of the 5 companies based in Hong Kong such as DorsettHospitality International, Sun Hung Kei Property, Sino Group, Crocodile and RegalHotel International Holding (Giovannini, 2010).
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