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Corporate governance rating of family firms at the Athens exchange market

Corporate governance rating of family firms at the Athens exchange market Purpose – Corporate governance (CG) has mainly focused on highly dispersed corporations. This paper has two objectives: to enrich the debate in this area and to contribute to the increasing body of literature by exploring the CG of the listed family firms in Greece; and to place the CG practices of Greek family firms within the international debate, especially in the framework of a small open capital market. In addition, this paper presents an attempt to quantify the compliance of family firms with international best practices. Design/methodology/approach – The methodology consisted of the creation of a questionnaire reflecting the Greek CG code and other well‐regarded CG codes, like the OECD principles. The authors constructed a CG rating system and applied it to distinguish family from non‐family firms. Findings – The main conclusion is that the family firms lack an efficient CG mechanism and they demonstrated poor governance compared with non‐family firms. Practical implications – The results disclose the potential strengths and weaknesses of the existing CG framework of the family‐owned firms. The methodology applies in a small open economy and may have significant implications in other similar capital markets. Originality/value – Methodologically, the merit of the exercise lies in its approach toward the creation of “collectively subjective” weightings, and is valuable to policymakers and academics. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Finance Emerald Publishing

Corporate governance rating of family firms at the Athens exchange market

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Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0307-4358
DOI
10.1108/03074350810874424
Publisher site
See Article on Publisher Site

Abstract

Purpose – Corporate governance (CG) has mainly focused on highly dispersed corporations. This paper has two objectives: to enrich the debate in this area and to contribute to the increasing body of literature by exploring the CG of the listed family firms in Greece; and to place the CG practices of Greek family firms within the international debate, especially in the framework of a small open capital market. In addition, this paper presents an attempt to quantify the compliance of family firms with international best practices. Design/methodology/approach – The methodology consisted of the creation of a questionnaire reflecting the Greek CG code and other well‐regarded CG codes, like the OECD principles. The authors constructed a CG rating system and applied it to distinguish family from non‐family firms. Findings – The main conclusion is that the family firms lack an efficient CG mechanism and they demonstrated poor governance compared with non‐family firms. Practical implications – The results disclose the potential strengths and weaknesses of the existing CG framework of the family‐owned firms. The methodology applies in a small open economy and may have significant implications in other similar capital markets. Originality/value – Methodologically, the merit of the exercise lies in its approach toward the creation of “collectively subjective” weightings, and is valuable to policymakers and academics.

Journal

Managerial FinanceEmerald Publishing

Published: Jun 6, 2008

Keywords: Family firms; Corporate governance; Greece

References