The Composition and Role of Family Boards in Chinese Businesses: A Business Cultural Perspective

What defines a family business? Many studies argue that it is the influence the owning family has on decision-making and operations of a firm. The extent and manner of such an influence depends critically on family business culture, the extent to which family and business values overlap, as well as the family's commitment to the business. Survey data on 117 unlisted small and medium sized Chinese family businesses form the basis of this study. Analysis showed that there is no relationship between family business culture and performance. However, the family's commitment to the business affects the board composition, working style, and roles of control, service, and family affair management. Comparatively, the influence of overlap between family and business values on the board is less significant, compared to the ratio of the family members in the board and the extent of board involvement in family affairs. Finally, the results indicate that the number of the family members involved in business management affects the family business culture.