Aims & objectives
This project on the evolution of governance arrangements in the family firm explored the evolution of governance structures and processes within the family founded firm as it seeks to manage growth. The project was completed in the autumn of 2001.
During 2001-2002 a number of papers which had previously been reported as forthcoming were published. The research comprised case study research where governance practices of family firms were explored. The case studies were drawn principally from the UK and Japan. The Japan/UK comparison was especially timely in view of the emphasis being given in both countries to attempts to nurture entrepreneurial businesses. At start up many enterprises rely very heavily on family structures; for example partners, parents or relatives are often included in the early group of employees. Even without explicit ‘blood’ ties many start ups are founded in quasi family ties of close friendships and personal loyalties. The attraction for founders of being able to draw upon such family relationships in the early stages of the enterprise are manifold; individuals are known, their labour is flexible, they can be trusted, loyalty and confidentiality can be counted upon, the demands of the new firm can be met in a way that prevents too sharp a division between work and home. The growth of such enterprises, however, raises a number of serious problems. For example, the management of the company can be complicated by tensions inherent in the founding family structures.
Also the growth of family firms is usually accompanied by the need to attract external finance. This is often accompanied by some degree of bureaucratisation, including the adoption of more formal governance structures in order to ensure appropriate accountabilities to external parties.
Results & dissemination
One of the principal conceptual contributions of the research has been to explore some of the meanings associated with ownership of the firm, which has received relatively little attention in the fields of economics and management science. The notion that shareholders are de facto owners of corporations, who appoint managers as their agents, is often taken for granted in the corporate governance literature. This project, in exploring the evolution of governance arrangements in the family firm, where majority shareholders are often also senior managers, has tried to cast some light on the changing nature of ‘ownership’ as the firm grows.
Learmount, S (2002) Theorizing corporate governance : new organizational alternatives. Centre for Business Research Working Paper No. 237.
Learmount, S (2002) Meanings of ownership of the firm. Centre for Business Research No. 238.
Learmount, S. (2002) Corporate Governance: what can be learned from Japan? Oxford, Oxford University Press.
Seki, T. & Learmount, S. (eds.) (2001) Corporate Governance in the UK. Tokyo: Shoji Homu Commercial Law Centre.
Reports & journal articles
Learmount, S. (2002). The Process of UK Corporate Governance Reform. Director & Legal Affairs, 92, 4-7.
Learmount, S., Cooper, R. & Press, M. (2000). Design Against Crime: a report to the Design Council, the Home Office and Department of Trade and Industry. Cambridge: Cambridge University Publications Centre.
Learmount, S. & Seki, T. (2000).Evolution of UK Corporate Governance 1: Sir Adrian Cadbury. Director & Legal Affairs, 75, 38-46.
Seki, T. & Learmount, S. (2000). Evolution of UK Corporate Governance 2: Sir Richard Greenbury. Director & Legal Affairs, 76, 63-71.
Seki, T. & Learmount, S. (2000). Evolution of UK Corporate Governance 3: Sir Ronald Hampel. Director & Legal Affairs, 78, 54-61.
Learmount, S. (1998). Approaching Japanese Corporate Governance. Japan Development Bank Research Reports, no. 9803. Tokyo: Japan Development Bank.
Learmount, S. & Remmer, B. (1997). Future Scenarios for the Chinese Telecoms Market. Telecommunications, March 1997, 61-100.
Learmount, S. (2001). International Institutional Investors and UK Corporate Governance. In T. Seki & S. Learmount (eds.) Corporate Governance in the UK. Tokyo: Shoji Homu [Commercial Law Centre.
Cadbury, A. & Learmount, S. (1999). Japanese Corporate Governance and Globalisation. In W. Slemen (ed.) Bridging the Millennium, Bridging the Countries: Anglo-Japanese concerns. London: Daiwa.