Corporate Governance Rating and Family Firms: The Greek Case

Corporate governance (CG) studies have mostly focused on highly dispersed corporations. However, there is an important need for research exploring the governance structure of family-owned firms. The main characteristics that distinguish the family firm from the other types of corporations are the presence of one or more controlling family and the involvement of the owners in the management. Family firm is the most common form of business in Greece. Hence, the governance structures and the performance of the family firms affect the growth opportunities of the capital market. The aim of the paper is to explore the main aspects of CG of family-owned listed companies in Greece. For this purpose, we apply a specific CG rating methodology, using five core CG criteria to distinguish family from non-family firms: shareholders' rights and obligations; transparency, disclosure of information and auditing; board of directors; CEO and executive management and corporate social responsibility and corporate governance commitment. The overall research objective of the study is to develop a CG rating methodology on the current state of corporate governance in Greece. Each firm is rated among the 120 total number of companies (both family-owned and widely- held). The results disclose the potential strengths and weaknesses of the existing corporate governance framework of the family-owned firms and provide specific policy recommendations.