Corporate Governance Rating of Family Firms at the Athens Exchange Market

Managerial Finance, Vol. 34, No. 7, July 2008

University of Athens Economics Working Paper

31 Pages Posted: 27 Jan 2005

See all articles by Loukas Spanos

Loukas Spanos

National & Kapodistrian University of Athens, Department of Economics, Center of Financial Studies

Lena Tsipouri

National & Kapodistrian University of Athens

Manolis Xanthakis

Athens Stock Exchange

Abstract

Corporate governance (CG) has mainly focused on highly dispersed corporations. This paper has two objectives: to enrich the debate in this area and to contribute to the increasing body of literature by exploring the CG of the listed family firms in Greece; and to place the CG practices of the Greek family firms within the international debate, especially in the framework of a small open capital market. In addition, this paper presents an attempt to quantify the compliance of family firms with international best practices. The methodology consisted in the creation of a questionnaire reflecting the Greek CG code and other well-regarded CG codes, like the OECD Principles. We constructed a CG rating system and we applied it to distinguish family from non-family firms. The main conclusion is that the family firms lack efficient CG mechanism and they are demonstrated poor governance compared with non-family firms. The results disclose the potential strengths and weaknesses of the existing CG framework of the family-owned firms. Our methodology applies in a small open economy and may have significant implications in other similar capital markets. Methodologically, the merit of the exercise lies in its approach toward the creation of collectively subjective weightings, and is valuable to policymakers and academics.

Keywords: Family firms, corporate governance rating, Greece

JEL Classification: G32, G39

Suggested Citation

Spanos, Loukas and Tsipouri, Lena and Xanthakis, Manolis, Corporate Governance Rating of Family Firms at the Athens Exchange Market. Managerial Finance, Vol. 34, No. 7, July 2008, University of Athens Economics Working Paper, Available at SSRN: https://ssrn.com/abstract=655021 or http://dx.doi.org/10.2139/ssrn.655021

Loukas Spanos (Contact Author)

National & Kapodistrian University of Athens, Department of Economics, Center of Financial Studies ( email )

Greece
00-30-210-2109213335 (Phone)

Lena Tsipouri

National & Kapodistrian University of Athens ( email )

5 Stadiou Strt
Panepistimiopoli, Ilisia 157
Greece

Manolis Xanthakis

Athens Stock Exchange

10 Sophocleous str.
Athens 105 59
Greece

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