Boards of directors in family firms: generational dynamics and the board's control and advisory tasks

Abstract

The objective of this dissertation is to enhance the understanding of the board’s control and advisory tasks in a family firm context. For this purpose, a generational life cycle and process approach are applied. The empirical results indicate that the generational phase has a significant impact on board task needs, board composition, and behavioral board processes. More specifically, the need for board advice shows a convex generational trend and these advice needs act as a mediator in the relationship between generation and the presence of outside directors. Moreover, the need for board control increases over the generations. However, contrary to our expectations, these control needs do not act as a mediator in the relationship between generation and the number of family directors. Regarding the relationship between the generational evolution and behavioral board processes, our results reveal that generation has a negative influence on the board’s intentional and ability trust in the family CEO, and a negative influence on the effectiveness of the control that the board exercises over the family CEO. Overall, these results highlight the importance of tailoring family firm boards to the requirements and specificities of the generational phase.