– The purpose of this paper is to empirically assess the effect, if any, of family ownership and busy boards on companies’ Tobin’s Q and cash holdings in France.
– Using a multiple regression analysis for panel data, the author investigate the impacts of being family-owned and of multiple directorships on cash holdings and then on Tobin’s.
– Family ownership seems to have no significant effect. The most significant finding is that family-owned companies are smaller and work in the manufacturing and construction sectors compared to non-family-owned companies. However, multiple directorship is not negatively related to firm performance in France.
– The current study focusses solely on France, which, even though different from the more usual American perspective, is not enough to make broad generalizations. It is however, a useful step toward better understanding the issues at hand. International data on family firms and busy boards, while hard to come by, would further enhance the knowledge of corporate governance.
– It is interesting to know if family-owned companies and those with multiple directorships perform differently from others, especially in a context where organizations can choose between a one-tier or two-tier system of governance, as is the case in France.
