The adoption of good Corporate Governance practices by small and medium-sized: A ADOÇÃO DE BOAS PRÁTICAS DE GOVERNANÇA DE PEQUENAS E MÉDIAS EMPRESAS

Morgana Cristina Vinholi; Rosilene Marcon; Jaison Caetano da Silva; Cinara Gambirage; Jeferson Lana

doi:10.33362/visao.v13i1.3256

Authors

Morgana Cristina Vinholi UNIVALI https://orcid.org/0000-0003-3308-408X
Rosilene Marcon UNIVALI https://orcid.org/0000-0002-0478-7715
Jaison Caetano da Silva FGV Ebape https://orcid.org/0000-0002-8737-152X
Cinara Gambirage University of Groningen/ UNIARP https://orcid.org/0000-0002-8166-1171
Jeferson Lana UNIVALI https://orcid.org/0000-0002-9787-1114

DOI:

https://doi.org/10.33362/visao.v13i1.3256

Keywords:

Family enterprises, SMEs, Agency theory, Corporate governance

Abstract

This study examines the adoption of good practices of corporate governance and the intensity of such practices in family small and medium enterprises (SMEs). We developed and tested our theoretical framework using survey data from Brazilian enterprises and factorial analysis and logistic regression. The results suggest that knowledge of benefits from corporate governance drives family enterprises to employ high levels of good practices of corporate governance while some managers features drives family enterprises to employ low levels of such practices. On the other hand, managers features can contribute to family enterprises employ low levels of good practices of corporate governance. We extend the discussion regarding antecedents of good practices of corporate governance employed by family enterprises and why some of them intensify corporate governance adoption more than others do. Likewise, we offer a wider perspective, theoretically and empirically, of antecedents of corporate governance mechanisms in family firms and the intensity of this adoption. Also, the study provides subsidies to managers make decisions regarding the employment of good practices of corporate governance in family enterprises and contributes to the improvement regarding the indexes of family enterprises mortality.

Author Biographies

Morgana Cristina Vinholi, UNIVALI

Ma in Business Administration from School of Business at UNIVALI.

Rosilene Marcon, UNIVALI

Dr in Production Engineering from UFSC. Professor at UNIVALI.

Jaison Caetano da Silva, FGV Ebape

Dr in Business Administration from School of Business at UNIVALI. Post-doctoral researcher from Brazilian School of Public and Business Administration at FGV.

Cinara Gambirage, University of Groningen/ UNIARP

Dr in Business Administration from University Regional of Blumenau. Assistant professor from Faculty of Economics and Business at University of Groningen.

Jeferson Lana, UNIVALI

Dr in Business Administration at FGV EAESP. Professor at UNIVALI.

References

ABOR, J.; ADJASI, C. Corporate governance and the small and medium enterprises sector: theory and implications. Corporate Governance: The international journal of business in society, v. 7, n. 2, p. 111-122, 2007. https://doi.org/10.1108/14720700710739769.

ABOR, J.; BIEKPE, N. Corporate governance, ownership structure and performance SMEs in Ghana: implications for financing opportunities. Corporate Governance, v. 7, n. 3, p. 288-300, 2007. https://doi.org/10.1108/14720700710756562.

AGUILERA, R. V.; DESENDER, K.; BEDNAR, M. K.; LEE, J. H. Connecting the Dots - bringing external corporate governance into the corporate governance puzzle. The Academy of Management Annals, v. 9 n. 1, p. 483-573, 2015. https://doi.org/10.5465/19416520.2015.1024503.

AZILA-GBETTOR, E. M.; HONYENUGA, B. Q.; BERENT-BRAUN, M. M.; KIL, A. Structural aspects of corporate governance and family firm performance: a systematic review. Journal of Family Business Management, v. 8, n. 3, p. 306–330, 2018. https://doi.org/10.1108/JFBM-12-2017-0045.

BERISHA, G.; PULA, J. S. Defining Small and Medium Enterprises: a critical review. Academic Journal of Business, Administration, Law and Social Sciences, v. 1, n. 1, p. 17-28, 2015. https://iipccl.org/wp-content/uploads/2015/03/Ajbals-17-28.pdf.

BERLE, A.; MEANS, G. The Modern Corporation and Private Property. New York: Macmillan, 1932.

BRUNNINGE, O.; NORDQVIST, M.; WIKLUND, J. Corporate governance and strategic change in SMEs: The effects of ownership, board composition and top management teams. Small Business Economics, v. 29, n. 3, p. 295-308, 2007. https://doi.org/10.1007/s11187-006-9021-2.

CORTÉS, D.; BOTERO, I. Corporate governance in family businesses from Latin America, Spain and Portugal: a review of the literature. Academia Revista Latinoamericana de Administración, v. 29, n. 3, p. 231-254, 2016. https://doi.org/10.1108/ARLA-03-2016-0064.

CHU, W. Family ownership and firm performance influence of family management, family control and firm size. Asia Pacific Journal of Management, v. 28, n. 4, p. 833-851, 2011. https://doi.org/10.1007/s10490-009-9180-1.

EISENHARDT, K. M. Making fast strategic decisions in high velocity environments. Academy of Management Journal, v. 32, n. 3, p. 543-576, 1989. https://doi.org/10.2307/25643.

ESRA, M.; MANISHA, S.; CELINE, B. Family governance and family firm outcomes. Journal of Family Business Management, v. 6, n. 2, p. 1-7, 2016. https://doi.org/10.1108/JFBM-05-2016- 0010.

FELÍCIO, J. A.; GALINDO VILLARDÓN, M. P. Family characteristics and governance of small and medium-sized family firms. Journal of Business Economics and Management, v. 16, n. 6, p. 1069-1084, 2015. https://doi.org/10.3846/16111699.2012.747446.

GARCÍA-RAMOS, R.; GARCÍA-OLALLA, M. Board characteristics and firm performance in public founder-and nonfounder-led family businesses. Journal of Family Business Strategy, v. 2, n. 4, p. 220-231, 2011. https://doi.org/10.1016/j.jfbs.2011.09.001.

GIBSON, B.; VOZIKIS, G.; WEAVER, M. Exploring governance issues in family firms. Small Enterprise Research, v. 20, n. 2, p. 87-97, 2013. https://doi.org/10.5172/ser.2013.20.2.87.

HE, L. Do founders matter? A study of executive compensation, governance structure and firm performance. Journal of Business Venturing, v. 23, n. 3, p. 257-279, 2008. https://doi.org/10.1016/j.jbusvent.2007.02.001.

JENSEN, M. C. The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, v. 48, n. 3, p. 831-880, 1993. https://doi.org/10.1111/j.1540-6261.1993.tb04022.x.

JENSEN, M.; MECKLING, W. Theory of the Firm: Managerial Behavior. Agency Costs and Ownership Structure. Journal of Financial Economics, v. 3, n. 4, p. 305-360, 1976. https://doi.org/10.1016/0304-405X(76)90026-X.

KARAM, P. B. S.; MACHADO FILHO, C.; ABIB, G. Conflicts in boards of family firms: A theoretical framework for strategic decision-making. Revista de Administração Contemporânea, v. 23, n. 6, p. 703-720, 2019. http://doi.org/10.1590/1982-7849rac2019190083.

KREUZBERG, D.; SEIBERT, R. M.; SILVA, R. C. F. da. Governança Corporativa: Um Estudo em uma Empresa Familiar do Ramo de Máquinas e Implementos Agrícolas. Desenvolvimento Em Questão, v. 20, n. 58, e11969, 2022. https://doi.org/10.21527/2237-6453.2022.58.11969.

KUSSUDYARSANA, K.; SOEPATINI, S.; MAIMUN, M. H.; VEMURI, R. Examining formal and relational governance in family small medium enterprises: Evidence from Indonesia. Journal of Entrepreneurship in Emerging Economies, v. 12, n. 2, p. 231-257, 2019. https://doi.org/10.1108/JEEE-10-2018-0108.

LA PORTA, R.; SHLEIFER, A.; LOPEZ-DE-SILANES, F.; VISHNY, R. Investor protection and corporate governance. Journal of Financial Economics, v. 58, n. 1-2, p. 3-27, 2000. https://doi.org/10.1016/S0304-405X(00)00065-9.

MASEDA, A.; ITURRALDE, T.; AROSA, B. Impact of outsiders on firm performance over different generations of family‐owned SMEs. Journal of Small Business Management, v. 53, n. 4, p. 1203-1218, 2015. https://doi.org/10.1111/jsbm.12119.

MEMILI, E.; SINGAL, M.; BARRÉDY, C. Family governance and family firm outcomes. Journal of Family Business Management, v. 6, n. 2, p. 1-7, 2016. https://doi.org/10.1108/JFBM-05-2016-0010.

MOKHBER, M.; GI GI, T; ABDUL RASID, S. Z.; VAKILBASHI, A.; MOHD ZAMIL, N.; WOON SENG, Y. Succession planning and family business performance in SMEs. Journal of Management Development, v. 36, n. 3, p. 330–347, 2017. https://doi.org/10.1108/JMD-12-2015-0171.

MUSTAKALLIO, M.; AUTIO, E.; ZAHRA, S. A. Relational and contractual governance in family firms: effects on strategic decision making. Family Business Review, v. 15, n. 3, p. 205-227, 2002. https://doi.org/10.1111/j.1741-6248.2002.00205.x.

NASCIMENTO, J. B.; SANTOS, T. B. S.; CUNHA FILHO, W. G. Research in Corporate Governance & Family Firms: a research agenda. Revista Organizações em Contexto, v. 10, n. 19, p. 131-153, 2014.

OLIVEIRA, O. V.; ARAGÃO, L. A.; RODRIGUES, V. M. Motivating Factors in The Adoption of Better Corporate Governance Practices by Brazilian Companies. Corporate Ownership & Control, v. 8, n. 1, p. 515-525, 2010. https://doi.org/10.22495/cocv8i1c5p3.

PERROW, C. Economic Theories of Organization. Cambridge University Press, 1986. http://dx.doi.org/10.1007/BF00156926.

PIEPER, T. M. Corporate governance in family firms: A literature review. INSEAD, 2003. p. 121-146.

PRASHAR, A.; GUPTA, P. Corporate boards and firm performance: a meta-analytic approach to examine the impact of contextual factors. International Journal of Emerging Markets, v. 16, n. 7, p. 1454-1478, 2021. https://DOI:10.1108/IJOEM-10-2019-0860.

QIU, H.; FREEL, M. Managing Family-Related Conflicts in Family Businesses: A Review and Research Agenda. Family Business Review, v. 33, n. 1, p. 90–113, 2020. https://doi.org/10.1177/0894486519893223.

RIBEIRO, J. P. M.; VIANA, D. M. DA S.; MARTINS, O. S. Efeito do Ciclo de Vida na Relação entre Qualidade da Governança Corporativa e Custo da Dívida das Empresas Abertas no Brasil. Contabilidade Gestão e Governança, v. 24, n. 3, p. 293–311, 2021. https://doi.org/10.51341/1984-3925_2021v24n3a3.

RIBEIRO, J. E.; SOUZA, A. A. 20 anos de governança corporativa no Brasil. Revista de Administração da Unimep, v. 19, n. 13, p. 156-180, 2022.

SCIASCIA, S.; MAZZOLA, P. Family involvement in ownership and management: exploring nonlinear effects on performance. Family Business Review, v. 21, n. 4, p. 331-345, 2008. https://doi.org/10.1177/08944865080210040105.

SHARMA, P.; CHRISMAN, J. J.; CHUA, J. H. Strategic management of the family business: Past research and future challenges. Family Business Review, v. 10, n. 1, p. 1-35, 1997. https://doi:10.1111/j.1741-6248.1997.00001.x.

SHLEIFER, A.; VISHNY, R. W. A survey of corporate governance. The Journal of Finance, v. 52, n. 2, p. 737-783, 1997. https://doi.org/10.1111/j.1540-6261.1997.tb04820.x.

STEIER, L. P.; CHRISMANN, J. J.; CHUA, J. H. Governance challenges in family businesses and business families. Theory and Practice of Entrepreneurship, v. 39, n. 6, p. 1265-1280, 2015. https://doi.org/10.1177/1042258717748650.

SUESS, J. Family Governance – literature review and the development of a conceptual model. Journal of Family Business Strategy, v. 5, n. 2, p. 138-155, 2014. https://doi.org/10.1016/j.jfbs.2014.02.001.

TRAMBACOS, F.; ALBANEZ, T.; CARVALHO, L. N. G. de. Proposta de Estrutura Conceitual para a Pesquisa em Governança Corporativa. Contabilidade Gestão e Governança, v. 24, n. 3, p. 312–330, 2021. https://doi.org/10.51341/1984-3925_2021v24n3a4 .

UHLANER, L. M.; FLOREN; R. H.; GEERLINGS, J. R. Owner commitment and relational governance in the privately-held firm: an empirical study. Small Business Economics, v. 29, p. 275-293, 2007. http://doi.org/10.1007/s11187.006.9009.y.

ZAHRA, S. A.; SHARMA, P. Family business research: A strategic reflection. Family Business Review, v. 17, n. 4, p. 331-346, 2004. https://doi.org/10.1111/j.1741-6248.2004.00022.x.