A Survey of Internal Governance in Family Business

Abstract

Family businesses play an important role in the global economic environment. In China, more than 90% of them use family management or family organization. This shows that family-owned companies are playing a decisive role in China’s economy. However, with regard to the current development situation, the development status of family-owned enterprises is not optimistic, and the average life expectancy is only 5 years. Facts have proved that internal governance is the key point for the steady development of family-owned enterprises. Internal governance supervision, as an important component of the five elements of internal control, is related to whether the internal management of a family-owned company can be implemented steadily and effectively. Therefore, a sound internal governance supervision system is the key point for whether the family business can survive in the modern economic competitive environment. This review points out the disadvantages of the family business and points out the new direction for the follow-up family business research that applies to the internal governance supervision model of the family business.