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Does one size fit all? An empirical investigation of board structure on family firms' financial performance

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  • Nirosha Hewa Wellalage
  • Stuart Locke
  • Frank Scrimgeour

Abstract

The current study investigates the relationship between family firm board structure and financial performance in Sri Lanka. This study uses five years (2006-2010) of data from 65 family firms listed on the Colombo Stock Exchange (CSE). In order to investigate the impact of board structure on family firm financial performance, a dynamic panel generalised method of moment estimation is applied. The results show that board openness to non-family members, board diversity and insider ownership decrease family firms' financial performance. Consequently, this study suggests the corporate governance framework needs to be tailored to a family business structure as 'one size does not fit all'.

Suggested Citation

  • Nirosha Hewa Wellalage & Stuart Locke & Frank Scrimgeour, 2012. "Does one size fit all? An empirical investigation of board structure on family firms' financial performance," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 3(2), pages 182-194.
    • Handle: RePEc:ids:afasfa:v:3:y:2012:i:2:p:182-194
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    Cited by:

    1. Nazliben, Kamil Korhan & Renneboog, Luc & Uduwalage, Emil, 2022. "Social Diversity on Corporate Boards in a Country Torn by Civil War," Discussion Paper 2022-001, Tilburg University, Center for Economic Research.
    2. Kamil K. Nazliben & Luc Renneboog & Emil Uduwalage, 2024. "Corporate governance from colonial Ceylon to post-civil war Sri Lanka," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(1), pages 265-335, March.

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