Corporate governance rating of family firms at the Athens exchange market

Citation:

Spanos L, Tsipouri LJ, Xanthakis DM. Corporate governance rating of family firms at the Athens exchange market. Managerial Finance [Internet]. 2008;34(7):465-478.

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.

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