Purpose The purpose of this paper is to explore board functions and their location in family firms.

Design/methodology/approach Through structured induction in a four-case study of medium-sized Swedish family firms, the authors demonstrate that board functions can be located in other arenas than in the common board and suggest propositions that explain their distribution. Findings (1) The board is but one of several arenas where board functions are performed. (2) The functions performed by the board vary in type and emphasis. (3) The non-family directors in a family firm serve the owners, even sometimes governing them, in what the authors term "bidirectional governance". (4) The kin strategy of the family influences their governance. (5) The utilization of a board for governance stems from the family (together with its constitution, kin strategy and governance strategy), the board composition and the business conditions of the firm.

Research limitations/implications Being a case study the findings are restricted to concepts and theoretical propositions. Using structured induction, the study is not solely inductive but still contains the subjectivity of induction.

Practical implications Governance agents should have an instrumental view on the board, considering it one possible governance arena among others, thereby economizing on governance.

Social implications The institutional pressure toward active boards could paradoxically reduce the importance of the board in family firms.

Originality/value The board of a family company differs in its emphasis of board functions and these functions are performed with varying emphases in different governance arenas. The authors propose the concept of kin strategy, which refers to the governance importance of the structure of the owner and observations on bi-directional governance, indicating that the board can govern the owners.

This dissertation explores and develops our conception of the board in familyfirms. The family firm is a specific type of organization in terms of corporategovernance, since it encompasses both the family and business systems.Typically, family members are present as owners, but also on the board and inthe management of the firm, creating, among other things, ambiguity as toroles. The board is thus not the only point of contact between owners andmanagers in these firms. Moreover, family firms exhibit a goal orientationtowards non-financial goals, in addition to financial ones. These characteristicsimply specific conditions for the board of directors in family firms.

To fulfill its purpose, this dissertation investigates different aspects of the boardof directors in four papers. The point of departure is a model that encompassesthe family and its intentions, board composition, board processes, boardfunctions, and outcomes. Different methodological approaches are used for thedifferent papers, since the methods chosen were determined by the researchquestions. The constituent papers of this dissertation comprise a conceptualstudy, as well as survey and case studies.

The overall conclusion of the dissertation is that the role of the board in familyfirms can differ from the role of the board in other types of firms due toambiguity stemming from the coexistence of family and firm considerations.This can manifest itself in the board taking on functions other than the usualones, such as participating in the succession process. Moreover, the compositionof family board members can affect what functions the board emphasizes.

Furthermore, overlap in the roles of family members can result in boardfunctions being performed in other domains than the board meeting,highlighting the complexity of what a board is. Policy makers and externaldirectors of family firms need to understand the family firm characteristics thatinfluence the board before making recommendations as to the best boardcomposition. In conclusion, we cannot rely solely on traditional conceptions ofthe board of directors when it concerns the board in family firms.

Succession in family firms is a crucial event, since it concerns the continuity ofthe firm as a family firm. The succession process starts with the introduction ofthe successor and ends with the withdrawal of the predecessor. The literatureindicates that the board of directors can have a role in both the introduction andwithdrawal phases, but this role has scarcely been researched. As the board isan intermediary between the family and the firm, and often consists of familymembers, it can be a means of managing family generations through thesuccession process. This paper aims to investigate the role of the board in thesuccession process, assuming that the board can be used as an arena in thisprocess. In addition to having governance functions over the firm, the board canhave a function directed at the family instead of the firm, related to thesuccession of family generations. More specifically, the board can providesupport in the process of introducing the next generation of family members tothe firm, and can engage the previous generation that is about to leave directoperations. This article contributes to the field by identifying the board as a toolin the succession process that can be used by the family for several purposes,depending on the family’s intentions.

Certain functions are ascribed to a board of directors, and are usually assumedto be performed within board meetings. However, research has observed boardfunctions to be performed in other domains, such as informal meetings. This isespecially prevalent in family firms, where directors usually have other roleswithin the firm in addition to being directors. This paper introduces bordertheory to family firm board research and analyzes four case studies of firms inorder to investigate board functions in other domains than the board meeting. Iidentify four different domains for board functions: board meetings, topmanagement team (TMT) meetings, spontaneous conversations, and familygatherings. Furthermore, I identify antecedents to board functions beingperformed in other domains. These are that the directors possess several roleswithin the firm, that they have the capacity for border-crossing, as well as thewillingness to cross borders. We also identify consequences of using otherdomains, which are that it can create tensions during certain circumstances, butunder other circumstances it can lead to the handling of family-specificquestions in other domains than the board meeting, and to convenient boardwork. Lastly, I discuss the management of the border of the board, meaning theefforts to align the directors’ views on where to conduct the board functions.

Purpose

The purpose of this paper is to develop and test a concept of auditor as consigliere in family firms, that captures additional functions to monitoring, those of advice, mediating, and conveying.

Design/methodology/approach

The concept is tested through a survey conducted on 309 Swedish auditors.

Findings

The data indicate that the consigliere role is generally not emphasized, indicating that auditors primarily perform the monitoring role of the audit. However, the authors do find indications of the auditor performing the consigliere role, through performing the advisory and mediating functions and, to a smaller degree, the conveying function.

Research limitations/implications

The survey is limited in response rate and in separating governance situations from consigliere functions.

Practical implications

With reservation for professional independence, the auditor as consigliere could be part of the governance of the family firm, but should be trained for this activity.

Social implications

Regulators should pay attention to the consigliere role when, for example, stipulating compulsory rotation of auditors.

Originality/value

The paper shows that the auditor is more than a monitor in family firms. The consigliere role, even if not at all dominating, has to be considered, at least in family firms.

The concept of good governance, as the manifestation of a larger ideology of shareholder value maximization, is designed for and promoted by large, manager-controlled listed corporations. The increasing adoption and growing legitimacy of good governance have led to the formation of a dominant institutional logic, which family firms experience pressure to adopt. Particularly strong is the pressure to increase the independence of the board of directors. While the process of change towards more independent boards may not necessarily contribute to increased economic efficiency or be fully able to fulfill the governance needs of family firms, these firms continue to adopt such practices. Drawing on institutional theory, we propose that institutional pressure is the dominant reason for family firms to adopt board independence. We then deduce potential consequences of this change, including positive consequences in terms of creation of both social and economic value, as well as negative consequences in terms of dilution of board meetings, demotivation of managers and decreased collaboration in the boardroom. Our study suggests that the benefits associated with the adoption of good governance can become offset by a decrease in the strategic adaptability of a firm.

The board of directors at the family firm is often dominated by family members. While research has acknowledged the presence of the family, it has neglected the actual family composition of the board and the effects it has on the board's activities. We study the family composition of the board through using insights from evolutionary psychology, stressing genetic kinship. We present a model where the contingency of genetic relationships of the family directors influences the functional emphasis of the family firm's board. Testing the hypotheses on a convenience sample of 68 small and medium-sized Swedish family firms, we find indications of genetic kinship influencing the functions of the board. We suggest the development of the family conception along these lines, where the importance of kinship ties and characteristics of nepotism are explored. The practical implication is a recommendation for families to have a conscious strategy to manage nepotism.