Corporate governance and family companies in succession processes: The view of the consultants and of the entrepreneurial families

Abstract

The studies on family companies have significantly increased in the past years, indicating the succession relevance for the longevity of these companies to future generations. Corporate governance has been presented as a transparent monitoring alternative in the succession process. Its acceptance by members of family companies, however, is not easy due to the lack of information regarding its actual effectiveness. Aiming to describe and analyze corporate governance in family businesses from the point of view of consultants and members of the family businesses, an exploratory research was developed on a qualitative basis that highlighted the theory concerning corporate governance in relation to family businesses. The collection of data was through individual semi-structured interviews with corporate governance consultants and members from the second and third generation of the entrepreneurial families. The data analyzed with the aid of a consistent literature indicate that both consultants and members of entrepreneurial families share a favorable view of the relevance of corporate governance to the families in a succession process. Besides, they share a view that even though the succession process is tough, long and requiring highly emotional involvement, the action of corporative governance fortifies the family business to grow and to develop, to perpetuate and also to become more attractive to the market through some rules, defined structures of roles and the possibilities of minimizing the latent conflicts in the relationships.

Keywords: family business, succession process, corporate governance.