Session 10: Shareholders and family firms Flashcards
Ownership of a share usually provides the right to
- receive dividends that have been duly declared for that class of share
- receive notice of all shareholder meetings
Shareholders do not have a right to
- get involved in management matters
- attend internal meetings of the company
In shareholders annual general meetings (AGM) decision of
- Zahlung der vorgeschlagenen Dividenden
- Genehmigung der wiederbestellung der Wirtschaftsprüfer
- Ernennung und Neubestellung der Direktoren
Shareholder activism
Shareholder activism kann viele Formen annehmen, meistens aber Kommunikation und Verhandlungen direkt mit dem Management.
- Media campaigns
- calling shareholder meetings
Shareholder activism
Separation between shareholders and top management lies at the heart of the governance system.
owner-manager conflict
owner-manager conflict ist gemildert, weil:
- weil ein größerer Anreiz besteht den Manager zu überwachen
- Familienmitglieder arbeiten als manager
A holding company
A holding company is the company at the head of a group pyramid of companies. Its board of directors is often called the ‘main board‘
A subsidiary company
A subsidiary company is one in which the holding or parent company holds all or a majority of the voting shares in that company
An associated company
An associated company is one in which the holding company, though not holding a majority of the shares, has sufficient interests to control it and determine its actions
Why create corporate pyramids?
- Corporate strategic grouping
- Legal contracting (contracts, employment etc.)
- Taxation
Advantages of Family Firms (FF)
- Owner = manager
- Few hierarchy levels,
- Flexibility, quick
Disadvantages of Family Firms (FF)
- Family conflicts
* Resource limitations
Paper: Villalonga and Amit
How do family ownership, control and management affect firm value?
Family ownership creates value only when the founder serves as CEO of the family firm. Wenn Nachkömmlinge als CEOs fungieren, der Firmenwert wird zerstört.
Paper: Andres (2008)
An empirical examination of founding-family ownership
- Family firms are not only more profitable
than widely-held firms but also outperform companies with other types of blockholders. - The performance of family businesses is only better in firms in which the foundingfamily
is still active either on the executive or the supervisory board
Def.: Definition of Socioemotional Wealth (SEW):
Nicht-finanzielle Aspekte der Firma, die die emotionalen Bedürfnisse der Familie, wie Identität, die Fähigkeit zur Einflussnahme der Familie, und die Beibehaltung der Familiendynastie erfüllen.
