Do Families Shape Corporate Board Structure in Emerging Economies?

Abstract

This study investigates whether there are significant differences in corporate board structure between family and non-family firms using listed companies in Bangladesh where family firms are the most dominant form of public companies. The results of this study suggest that family firms in Bangladesh adopt a distinctly different board structure from non-family firms. In particular, this study finds that family firms have a lower proportion of independent directors and foreign directors than non-family firms. Further, family firms have smaller boards than non-family firms. However, family firms are likely to have more CEO duality and female directors than their non-family counterparts. The findings of this study contribute to extant research on corporate board structure. The overall findings of this study imply that families of Bangladeshi firms have a different board structure compared to non-family firms, and the structure appears to promote a close locus of control for families that facilitates family dominance to prevail.