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Entrepreneur’s Wealth vs. Firm’s Welfare: Exploring an “evergreen” governance for firm succession

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  • Kevin Levillain

    () (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)

  • Blanche Segrestin

    () (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)

Abstract

In successful privately held companies, where main shareholders and managers are strongly linked, the exit of a founder creates a dilemma between maximizing their wealth through external investment and perpetuating the organizational model by limiting external shareholders. Papers generally show that the entrepreneurs’ personal motivations are stronger factors, thus explaining the frequent transition of startups to public corporation models. But is there leeway to design different governance models, for example aiming to facilitate the firm’s transmission? Based on a case study of a french management consulting firm, we reveal a variety of parameters that can be at play when designing the ownership and management structure of such a company, and thus of the possible governance systems to be considered. Although the validity area of the case we exhibit is presumably limited, we contend that it opens a category of models that research could explore, strengthen and potentially contribute to diffuse.

Suggested Citation

  • Kevin Levillain & Blanche Segrestin, 2016. "Entrepreneur’s Wealth vs. Firm’s Welfare: Exploring an “evergreen” governance for firm succession," Post-Print hal-01292956, HAL.
  • Handle: RePEc:hal:journl:hal-01292956
    Note: View the original document on HAL open archive server: https://hal-mines-paristech.archives-ouvertes.fr/hal-01292956
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    References listed on IDEAS

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    Keywords

    Professional Service Firms; Privately held companies; Corporate governance; Firm succession; Partnerships;

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