‘Helping the Family’: The Mediating Role of Outside Directors in Ethnic Chinese Family Firms

Human Relations, Vol. 60, No. 2, pp. 285-314, 2007

31 Pages Posted: 27 Oct 2011

See all articles by Wilson Ng

Wilson Ng

University of Roehampton

John D. Roberts

University of Sydney Business School

Date Written: September 30, 2007

Abstract

This article explores the nature and process of non-executive director (NED or non-executive) influence in quoted, family controlled firms (FCFs) through two company case studies in Singapore. Existing views of the non-executive role in such firms have been derived from theory, with traditional and ‘new’ agency approaches and resource dependence theory each offering differing prescriptions of the role. The article reviews this literature and suggests the potential value of qualitative research for understanding and reconciling competing prescriptions of the NED role. It then presents two case studies which explore the processes whereby independent non-executives seek to influence decision-making during critical incidents in the life of two FCFs. Based on these cases the article critiques the zero-sum view of power and the ‘nuclear’ conception of the family that informs much of the suspicious and hostile perspective of family control held by some agency scholars. In contrast, the article argues for a relational conception of power through which NEDs, despite the reality of family power and control, achieve effective influence through playing a vital mediating role in a web of firm and family relationships. This involves NEDs in defending the collective interest in the continuity of an ‘extended’ family of the firm against the damaging intrusion of ‘family altruism’ and managerial opportunism. Such a role can augment the authority of nonexecutives and the board whilst allowing necessary changes to be implemented.

Keywords: board studies, corporate governance, family firms, family-controlled firms, non-executive directors, overseas Chinese families

JEL Classification: M13

Suggested Citation

Ng, Wilson and Roberts, John D., ‘Helping the Family’: The Mediating Role of Outside Directors in Ethnic Chinese Family Firms (September 30, 2007). Human Relations, Vol. 60, No. 2, pp. 285-314, 2007, Available at SSRN: https://ssrn.com/abstract=1949428

Wilson Ng (Contact Author)

University of Roehampton ( email )

Queen's Building
Roehampton Lane
London, SW15 5LS
United Kingdom
07557098046 (Phone)

John D. Roberts

University of Sydney Business School ( email )

Cnr. of Codrington and Rose Streets
Sydney, NSW 2006
Australia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
41
Abstract Views
306
PlumX Metrics