Protected by the family? How closely held family firms protect minority shareholders

摘要

Most companies in the world are family-owned, and a majority of them operate in countries where the legal protection of minority shareholders is weak at best. In spite of previous arguments to the contrary, research shows that agency problems among owners actually increase in family-ownership situations, so family control by itself may not be an efficient substitute for the legal protection of minority investors. In this article we analyze successful strategies used by non-US business groups and firms to increase the satisfaction of their minority shareholders and to limit the incentives of the controlling shareholders to abuse them, and predict the outcomes of that protection. From these experiences we are able to suggest conditions needed to link family control and minority shareholder protection.