This study explores the interplay between governance and growth in privately held, family-run small and midsize enterprises.
We used an abductive, exploratory and longitudinal methodology, using data from two semi-structured interviews and an online questionnaire completed by 17 owner-managers of family farms in Quebec, Canada.
The study highlights the crucial role of corporate governance in facilitating the growth of family farms. The findings indicate that implementing formal governance mechanisms early in a firm’s lifecycle can significantly facilitate growth. Three distinct phases of corporate governance were identified, with governance either concurrently or sequentially related to growth, depending on the phase. Farms progressed to a new lifecycle phase when gaps arose between their growth trajectory and their human and organizational capacities or due to changes in ownership or generational turnover.
The findings indicate that, to foster growth, farmers should proactively establish formal governance mechanisms from the onset, tailored to their specific growth objectives. Recommended practices include financial, strategic and investment planning; delegating operational responsibilities and the creation of governance bodies, such as family councils or boards.
This study advances our understanding of corporate governance lifecycles by confirming the dynamic relationship between growth and governance in private, family-run enterprises, including during the early stages of development.
