The economic and emotional value of governing the business-owning family

Family governance is of fundamental value for family businesses as the sustainability of the family business depends to a large extent on the manner the family organizes itself and its relation to the business. Although the body of knowledge on family governance has been growing over the last few years, the number of empirical research on this topic is still rather limited. To bridge this gap, using stewardship theory this paper addresses both the economic value of family governance practices (in terms of enhancing the family business owners' aim of increasing family wealth) and their emotional value (in terms of enhancing the quality of relationships and creating a shared vision among family business owners). Based on a random sample of Dutch businesses, findings indicate a positive relation between family governance practices (FGP's) and the aim of increasing family wealth among family business owners. Nevertheless, hypotheses predicting positive effect of FGP's on shared vision and the quality of relationships among family business owners were not supported.