• The Impact of Family Business and Board Structure on Corporate Governance Evaluation in the Corporate Life Cycle

Abstract

Purpose – To investigate whether a chairman concurrently serving as a general manager and the proportion of independent directors, affect the corporate governance and the ranking results of the corporate governance evaluation in different corporate life cycles of family business.

Design/methodology/approach – Corporate life cycle is divided into the growth, mature and declining stages; the ranking results of corporate governance evaluation are classified into two tiers, the top 20% and 80% consisting of others.

Findings – Both the family business in its mature stage and the chairman concurrently serving as the general manager in growth stage, have a negative impact in evaluation and ranking of corporate governance. Additionally, the higher proportion of independent directors in the growth stage, the more positive the ranking of corporate governance evaluation.

Research limitations/implications – In future research with the board structure may take the background, experience, gender, age, along with other factors into account.

Practical implications/Social implications – In the mature stage of a family business, sound corporate governance can contribute to the results of corporate governance evaluation rankings positively.

Originality/value – The aim here is to provide an important reference for family business, to adjust the business model with the corporate life cycle stage, to choose the investment targets, and assist the government authorities with the policies.

Keywords –  Corporate life cycle, Family business, Corporate governance evaluation, Chairman concurrently serving as the general manager, Independent director