A concern of family firms is to ensure survival across generations as a family firm. But survival also relates to whether the firm goes bankrupt or not. We know that succession presents major challenges for family firms and that many do not make it beyond the first and second generations. We also know that family firms are more risk averse than non-family firms, a reflection of the desire to see the business handed on to the next generation. However, until we carried out our study there was little systematic evidence on whether family firms are more likely to survive than non-family firms and the factors that drive such differences.
As the boards of family firms play a central role in deciding upon strategy and differ from boards in non-family firms, our focus was on examine the role of board composition. More than any other group, the board has ultimate control of the direction of the firm to ensure its survival as a viable business. Our research uses the population of private firms in the UK and is the largest study to date on this topic. Read more