Managing corporate governance management of family firms in South Asia: evidence from Bangladesh and Sri Lanka

This study is an attempt to explore the corporate governance (CG) practices in the family firms of Bangladesh and Sri Lanka. Here, special emphasis has been given to finding out the level of board independence in the family firms of two selected countries. To understand the CG environment of the selected firms both descriptive statistics and ordinary least squares (OLS) regression analyses have been used. Based on the findings, study shows that the level of board independence in Bangladeshi and Sri Lankan family firms is very weak though Sri Lankan firms have relatively better board independence compared to Bangladeshi firms. Another finding of the study is that most of the family firms of both countries have chief executive officer (CEO) from the controlling family. Finding of high level of family ownership also indicates the tendency of keeping management control by the family members. Results on the relationship of board independence with family ownership and family CEO show some significant relationships. This study finds significant positive impact of family ownership on board independence. However, findings of the study show that there is a positive and significant impact of family CEO on the positive relationship between the board independence and family ownership.