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.

 Recent studies argue that the spread-adjusted Taylor rule (STR), which includes a response to the credit spread, replicates monetary policy in the United State. We show (1) STR is a theoretically optimal monetary policy under heterogeneous loan interest rate contracts in both discretionay and commitment monetary policies, (2) however, the optimal response to the credit spread is ambiguous given the financial market structure in theoretically derived STR, and (3) there, a commitment policy is effective in narrowing the credit spread when the central bank hits the zero lower bound constraint of the policy rate.