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This study investigates the impacts of family presence and board independence on corporate financial performance in 131 large listed firms from India, an emerging economy dominated by the presence of large business groups having concentrated ownership. Family presence includes the extent of family ownership and appointment of family CEO and family chairperson. Employing a multiple linear regression model, this study first detects a positive relationship between family ownership and financial performance. Second, a negative relationship is found between family CEO and firm performance, indicating that family firms with non-family CEOs perform better than firms having family CEOs. Third, the proportion of Board outsiders (i.e. independent non-family directors) is found to have no significant relation to financial performance, thus challenging agency theory's need for independent monitoring in family firms to enhance performance. These results are interpreted in the context of historical Indian family business practices and modern changes.

Item Type:	Refereed Article
Keywords:	family ownership, family CEO, board governance, new economy industries, corporate financial performance, India
Research Division:	Commerce, Management, Tourism and Services
Research Group:	Accounting, auditing and accountability
Research Field:	Accounting, auditing and accountability not elsewhere classified
Objective Division:	Expanding Knowledge
Objective Group:	Expanding knowledge
Objective Field:	Expanding knowledge in commerce, management, tourism and services
UTAS Author:	Pandey, R (Dr Rakesh Pandey)
ID Code:	149557
Year Published:	2011
Deposited By:	Accounting and Accountability
Deposited On:	2022-04-04
Last Modified:	2022-05-13
Downloads:	1 View Download Statistics