Reflexive deliberations of family directors on corporate board reforms: publicly listed family firms in an emerging economy

ABSTRACT

The paper examines the responses of family directors to board reforms. The notion of reflexivity is used to account for family directors’ concerns and subjectivities shaping board practices. To empirically ground the reflexive deliberations of family directors, the paper draws on qualitative data gathered from 25 in-depth semi-structured interviews in combination with archive material and an extensive documentary survey. The paper has demonstrated how family directors deploy the resistance strategies such as organisation of coordinated lobbies, counter-narratives and codification of internal rules to keep the change minimal. The paper contributes to the debate on distorted/symbolic compliance, seen as resistance in this paper, often being reduced to institutional embeddedness or overgeneralised notion of interests/conflicts in family publicly listed companies. The paper also makes a case of a new theoretical dimension – reflexivity – which enables an understanding not only of family directors’ economic but also non-economic concerns relating to board reforms.

KEYWORDS:

• Family directors
• reflexive deliberations
• corporate governance
• board practices
• family firms
• emerging economies

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 All six PLCs report some identifiable share of ownership by at least one family member and having multiple generations in leadership positions.

2 World Bank (2009, p. 4) finds that only direct holdings are reported whereas indirect or “beneficial” ownership remains undisclosed.

3 Life history interview calls on interviewees to provide a subjective account of their life over a certain period or about certain aspect/event (Bertaux, 1981).

4 The biographical approach captures interviewees' work, life and family backgrounds.

5 Seven preliminary interviews (not included in the count of 25 interviews) were conducted. These interviews provided an informed basis on which to interview the family directors and helped careful development of the interview guide.

6 This involved the formation of a new capital markets regulatory body, enactment of a new Companies Act, changes to exchange and listing rules, and recent publication of corporate governance codes.

7 This study is based on the Corporate Governance Guidelines or Code issued in 2012, which is hard law for listed PLCs (BSEC, 2012). In 2018, a revised code was issued keeping the board requirements the same with additional provision for the formation of compensation committees.

8 The charging of interest is prohibited in Islam.