Good Corporate Governance Structures: A Must for Family Businesses

Corporate governance refers to the structures and processes for the direction and control of busi-nesses and the relationships among the management, board of directors, controlling shareholders, minority shareholders and other stakeholders. Since good corporate governance contributes to sustainable economic development by enhancing the performance of companies, it is imperative that companies adopts good corporate governance structures to enable them grow. Family busi-nesses are an often overlooked form of business ownership in today’s world, yet they constitute a majority of the businesses. This means that families own a significant share of businesses and can influence important decisions in today’s business world. However, according to Neubauer and Lank, until recently, the study of corporate governance in family business has been a largely neg-lected area of research [1]. As family businesses are an important component of every economy and play a critical role in promoting growth of a country’s economy, as they grow, they face same challenges and pressures as any major corporation. To succeed, they must remain ahead of the competition, adopt good corporate governance practices and skillfully navigate through market changes. This paper is an empirical study from the current authors ’ previous work on the topi