Board Composition and Family Firms’ Profitability. Do Generational Stage and Performance Level Matter?

Annalisa Sentuti, Gail Denisse Chamochumbi Diaz, Francesca Maria Cesaroni


International Journal of Economic Behavior, vol. 10, n. 1, 2020, 3-13

This article examines the relationship between board composition and family firms’ performance. Namely, by adopting the theoretical framework of socio-emotional wealth and analyzing a sample of Italian medium-sized family firms, we investigate how the presence of non-family directors affects their financial performance, considering the generational stage as a moderating variable. Findings suggest that a higher presence of non-family directors has a less positive effect on first-generation family firms than in later generations of family firms. Furthermore, by adopting a quantile regression, results show that this effect is more striking in low-performing family businesses than in high.


Keywords: Family Businesses; Board of directors; Firm performance; Non-family directors; Corporate governance; Generational stage; First-generation family firms; Quantile regression

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