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Conflict between Controlling Family Owners and Minority Shareholders: Much Ado about Nothing?

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  • Geoffrey Martin
  • Luis R. Gómez–Mejía
  • Pascual Berrone
  • Marianna Makri

Abstract

We examine the unique nature of conflict between controlling family owners and minority shareholders (principal–principal conflict) in publicly traded family controlled firms through examining shareholder proposals. Implicit in prior governance and family business research has been that nonfamily shareholders are likely to be in conflict with the dominant family owners. In general, we find that much of this fear may be unwarranted except under specific circumstances. Our findings elucidate sources of heterogeneity in family firm principal–principal conflict and add greater nuance to our understanding of this type of agency problem within family firms.

Suggested Citation

  • Geoffrey Martin & Luis R. Gómez–Mejía & Pascual Berrone & Marianna Makri, 2017. "Conflict between Controlling Family Owners and Minority Shareholders: Much Ado about Nothing?," Entrepreneurship Theory and Practice, , vol. 41(6), pages 999-1027, November.
    • Handle: RePEc:sae:entthe:v:41:y:2017:i:6:p:999-1027
    DOI: 10.1111/etap.12236
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