Entrenchment in Publicly-Traded Family Firms: Evidence from the S&P 500

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Esra Memili, Associate Professor of Entrepreneurship (Creator)
The University of North Carolina at Greensboro (UNCG )
Web Site: http://library.uncg.edu/

Abstract: Family involvement in corporate governance through ownership, management, and board membership presents a unique dilemma for understanding the strategic impetus and costs of entrenchment decisions. The presence of shared family ties and the family-centered goals of firm principals call to question the applicability of extant agency arguments regarding the nature and antecedents of managerial entrenchment. Exploring this, we develop and test a model of family firm-specific determinants (i.e., family ownership and family's involvement in management and governance) of entrenchment in publicly traded firms by drawing upon principal-principal agency theory. Findings of the empirical analysis of family owned S&P 500 firms suggest family firms are motivated to entrench managers when doing so supports the pursuit of family-centric goals. However, the extent to which entrenchment supports such goals varies at different levels of family ownership.

Additional Information

Long Range Planning
Language: English
Date: 2017
Entrenchment, Family governance, Agency theory, Family firm heterogeneity

Email this document to