Proceedings of ‏The 3rd International Conference on Business, Management and Economics

Year: 2020

DOI:

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The Relationship between Family Power and Board Communication Quality in Turkish Public Family Firms

Özgür Atılgan

ABSTRACT: 

The role of boards gained significant importance after the presentation of OECD guidelines thatmade the boards as an indispensible corporate goevrnance mechanism for effective communication between owners and shareholders,strategic guidence forthe company, supervision of top level management and accountability for the shareholders and other external stakeholders. In family businesses, boards are considered as one of the most important governance mechanisms in establishingan effective communication channel between shareholders and top managementand also within the family.Yet, it is not easy to measure the boardcommunicationquality. This study attempts to investigatethe effects of family members proportion in boardsand ownership concentration on communication quality by using board meeting attendance rate as a proxy measurefor communication quality. Forthis purpose, secondary data from the annual reports, corporate governance compliance reports and general information on capital and shareholdersof 162 family firmsenlisted in Istanbul Stock Exchange (BİST)was obtained and the correlation analysiswas performed.The results implicate that there is no significant relationship between family members proportion in boards and board attendance and also no significant relationship has been found between ownership concentration and board attendance. Resultsonly indicate that higher family ownership concentration increases the family members proportion in boards.

Keywords: :Family Boards, Family Ownership, Percentage of Family Members on Board, Board Meeting Attendance Rate, Communication Quality