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Three Essays on Corporate Governance of Family Firms

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Three Essays on Corporate Governance of Family Firms

El Masri, Tarek (2017) Three Essays on Corporate Governance of Family Firms. PhD thesis, Concordia University.

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Abstract

This dissertation is comprised of three essays on issues related to the corporate governance of family firms. The first essay explores how owners-managers of family firms conceptualize and define their firms. Understanding the essence of a family firm helps us better understand their governance and behaviour. This essay contributes to the family business literature by presenting the seven most important criteria in identifying a family business (Handler 1989; Shanker & Astrachan 1996), namely: family ownership, control, involvement, succession, long-term vision, founders’ legacy, and extended family of employees. The essay also contributes a familiness measurement tool that can be used in future research aiming at better understanding the family firm.

The second essay investigates how management control technologies are calibrated in accordance with the sometimes conflicting economic and noneconomic goals resulting from the dual identities of family firms. The results show that family firms calibrate pervasive management control technologies, such as calculative, family-centric or procedural controls to strengthen the business identity and reduce the family identity of their family business. In comparison, the minimal use, or perceived absence, of management control technologies suggest that it accentuates and fosters family identity. Hence, reverting to management control technologies becomes related in a unilateral way to the business identity of the firm, despite the dual control ambition of family firms.

The third essay analyzes CEO and TMT compensation practices to identify patterns that can explain the gap between family firms and the pool of external highly qualified executives. The data analysis highlights a connection between the degree of family ownership, the composition of the BOD, and the identity of the CEO. The results also show that family firms rely more heavily on cash-based awards than on equity-based awards as a form of CEO and TMT compensation. Family firms are reluctant to use option-based rewards and the use of share-based awards is also kept at a minimum. Other evidence point towards a role that institutional ownership plays in restructuring the compensation packages of the TMTs at family firms.

Keywords: Family Firms, Definition of Family Firms, Family Firm Identity, Management Control Technologies, Corporate Governance, Executive Compensation

Divisions:Concordia University > John Molson School of Business > Accountancy
Item Type:Thesis (PhD)
Authors:El Masri, Tarek
Institution:Concordia University
Degree Name:Ph. D.
Program:Business Administration (Accountancy specialization)
Date:July 2017
Thesis Supervisor(s):Magnan, Michel and Boulianne, Emilio
ID Code:983113
Deposited By: TAREK EL MASRI
Deposited On:05 Jun 2018 15:19
Last Modified:05 Jun 2018 15:19
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