Family Business Governance Research

In the family business, due to the control structure design, as well as the involvement and control of the general meeting of shareholders, director board and professional managers, induce a series of corporate governance issues. The pyramid control mode, highly concentration of family ownership, family directors as well as family professional managers phenomenon makes it not only motivated but also with a convenient channel against the corporate public interest, by "tunneling", so as to achieve the purpose of maximizing benefit of the family.In this paper, the principal-agent theory in the Contract theory of Institutional Economics is used to systematically analyzing the corporate governance under family control, shareholder governance, board governance and professional managers in the governance problems. The control over governance, shareholder governance, board governance and professional managers governance are deeply analyzed in this paper. Corresponding solutions specifically for those four governance problems are given after.This article also makes three typical family business cases analysis, and specifies a detailed analysis of the problems in practical level in the family business governance, as well as a detailed comparison of the similarities and differences between them.In the empirical research, the paper first tests the market reaction to the event of unfamilization.Furthermore, with the index selection of shareholders’ governance structure, the governance structure of the Director Board and the professional managers governance, multiple linear regression model is used to the empirically analyze the impact of family business governance to corporate performance, and explore the key factors in corporate governance.