As individuals or families hold a substantial share of a firm at the cost of less diversified portfolio, they specialize their portfolio and have better inside information. Does the market marker react to this fact and maintain higher level of asymmetric information cost for such family-controlled firms? We analyze the bid-ask spread and the probability of informed trading (PIN) of Canadian-based publicly traded firms cross-listed with NYSE/AMEX to test this notion. We find that although the market maker maintains higher average spread, he does not form higher PIN for family-controlled firms when the entire day is considered as an event period. <p>The assumption of constant arrival rates of informed and uninformed traders during the day in Easley et al (1996b) is rejected in the two periods per day analysis. In addition, the notion of information event occurrence prior to the day in Easley et al (1996b) is consistently rejected as higher (non-statistically) probability of information events is found in the afternoon (second session) in the two (three) periods per day analyses, respectively. Based on these findings, we have serious doubts about any existing findings (including ours) of PIN based on one period per day. As such, we consider the possibility of several periods per day.<p>Though it remains an empirical question to choose how many periods should be considered, we find our results using two and three periods per day to be very interesting. We consistently reject the hypothesis that the PIN is higher for family-controlled firms. Since the market maker does not need to maintain high spread for firms with very high number of uninformed traders and very low number of informed traders, we do not perceive our findings to be either surprising or contradictory to the present literature. By developing a different formulation of PIN, we also show that this is empirically less than that developed by Easley et al (1996b).

As individuals or families hold a substantial share of a firm at the cost of less diversified portfolio, they specialize their portfolio and have better inside information. Does the market marker react to this fact and maintain higher level of asymmetric information cost for such family-controlled firms? We analyze the bid-ask spread and the probability of informed trading (PIN) of Canadian-based publicly traded firms cross-listed with NYSE/AMEX to test this notion. We find that although the market maker maintains higher average spread, he does not form higher PIN for family-controlled firms when the entire day is considered as an event period. <p>The assumption of constant arrival rates of informed and uninformed traders during the day in Easley et al (1996b) is rejected in the two periods per day analysis. In addition, the notion of information event occurrence prior to the day in Easley et al (1996b) is consistently rejected as higher (non-statistically) probability of information events is found in the afternoon (second session) in the two (three) periods per day analyses, respectively. Based on these findings, we have serious doubts about any existing findings (including ours) of PIN based on one period per day. As such, we consider the possibility of several periods per day.<p>Though it remains an empirical question to choose how many periods should be considered, we find our results using two and three periods per day to be very interesting. We consistently reject the hypothesis that the PIN is higher for family-controlled firms. Since the market maker does not need to maintain high spread for firms with very high number of uninformed traders and very low number of informed traders, we do not perceive our findings to be either surprising or contradictory to the present literature. By developing a different formulation of PIN, we also show that this is empirically less than that developed by Easley et al (1996b).

<p>Background:</p><p>Family-business is considered to be the most frequent and complex form of business</p><p>organization around the world. However, recently there has been a large number of</p><p>corporate scandals in such firms especially at the board level (e.g. Parmalat). Within the</p><p>framework of two corporate governance models characterized by the Continental European</p><p>and the Anglo-Saxon model, boards of directors hold a central position. This position</p><p>becomes of great importance when talking about public companies and more specifically in</p><p>public family-controlled companies. The concentration of ownership is the main</p><p>characteristic of the Continental European, which is the most workable form of corporate</p><p>governance for family-controlled business. Nevertheless, family-controlled companies acting</p><p>under the Anglo-Saxon model have also been able to operate successfully. Therefore, we</p><p>will investigate if there is a convergence of corporate governance in family-controlled</p><p>companies across frontiers focusing mainly on boards’ structures and composition as well as</p><p>ownership, and the sub-committees.</p><p>Purpose:</p><p>The overall purpose of this thesis is to contribute to the understanding of Corporate</p><p>Governance in public Family-controlled firms which are in the Swedish and United</p><p>Kingdom stock market. More specifically, investigate whether the boards’ structures and</p><p>composition, as well as ownership and the existence of sub-committees show similarities or</p><p>not in Family-controlled firms acting within the framework of an Anglo-Saxon and</p><p>Continental model of Corporate Governance</p><p>Method:</p><p>A quantitative approach was used to fulfill the purpose of this thesis. Furthermore, the top</p><p>10 family-controlled companies with highest market-capitalization have been selected from</p><p>both countries to constitute our sample. The empirical material was gathered mainly from</p><p>the annual reports of the companies but also by contacting the companies by email or from</p><p>articles in online newspapers.</p><p>Conclusion:</p><p>This study found that in some aspects of corporate governance convergence exists while in</p><p>others it does not. Regarding board structures and composition, there is a convergence to</p><p>“one tier board” and the presence of family members and employee representation in boards.</p><p>On the other hand, when it comes to the sizes of the boards and number of independent</p><p>directors in the boards we argue that convergence is not present.</p>

Background: Family-business is considered to be the most frequent and complex form of business organization around the world. However, recently there has been a large number of corporate scandals in such firms especially at the board level (e.g. Parmalat). Within the framework of two corporate governance models characterized by the Continental European and the Anglo-Saxon model, boards of directors hold a central position. This position becomes of great importance when talking about public companies and more specifically in public family-controlled companies. The concentration of ownership is the main characteristic of the Continental European, which is the most workable form of corporate governance for family-controlled business. Nevertheless, family-controlled companies acting under the Anglo-Saxon model have also been able to operate successfully. Therefore, we will investigate if there is a convergence of corporate governance in family-controlled companies across frontiers focusing mainly on boards’ structures and composition as well as ownership, and the sub-committees. Purpose: The overall purpose of this thesis is to contribute to the understanding of Corporate Governance in public Family-controlled firms which are in the Swedish and United Kingdom stock market. More specifically, investigate whether the boards’ structures and composition, as well as ownership and the existence of sub-committees show similarities or not in Family-controlled firms acting within the framework of an Anglo-Saxon and Continental model of Corporate Governance Method: A quantitative approach was used to fulfill the purpose of this thesis. Furthermore, the top 10 family-controlled companies with highest market-capitalization have been selected from both countries to constitute our sample. The empirical material was gathered mainly from the annual reports of the companies but also by contacting the companies by email or from articles in online newspapers. Conclusion: This study found that in some aspects of corporate governance convergence exists while in others it does not. Regarding board structures and composition, there is a convergence to “one tier board” and the presence of family members and employee representation in boards. On the other hand, when it comes to the sizes of the boards and number of independent directors in the boards we argue that convergence is not present.

本研究在探討家族、非家族控制企業與私有資訊交易之關係，私有資訊交易是以當未預期盈餘為負時，在每季盈餘宣告前之異常融券放空為判斷依據。我們希望了解家族控制企業相對於非家族控制企業是否存在較多之私有資訊交易。實證結果指出當未預期盈餘為負時，在每季盈餘宣告前，家族控制企業相較於非家族控制企業確實存在較多異常融券放空之現象。另外，我們從實證結果亦發現當未預期盈餘為負時，則家族成員涉入經營程度愈高、家族盈餘分配權愈低以及股份盈餘偏離程度愈高之公司，在每季盈餘宣告前，其融券放空之行為相對於其他企業會比較多，由此推論出家族控制特性與所有權結構和隱含資訊之融券放空行為有關。此外，研究結果亦指出巨量融券放空可以用來預測股票未來之異常報酬，但家族控制企業之巨量融券放空相對於非家族控制企業並沒有提供較多有用資訊來預測股票未來之超額報酬。 / We investigate the relation between the information content of short sales and organization structure. We want to know that informed trading occurs more readily in family-controlled firms than in nonfamily firms. Our analysis indicates that family-controlled firms experience substantially greater abnormal short sales prior to negative earnings shocks than nonfamily firms. The analysis also indicates that family-controlled firms sustain marginally less abnormal short sales prior to positive earnings surprises than nonfamily firms. Supplementary testing indicates that characteristics of family control and ownership intensify informed short selling. Further analysis suggests that high short-selling tend to be informative in predicting future returns. However, we find that high short-selling in family-controlled firms do not contains more useful information in forecasting stock returns than nonfamily firms.

La tesi si pone l’obiettivo di investigare la relazione tra composizione del CDA e le performance delle imprese familiari quotate italiane. Il database, interamente raccolto a mano, copre un periodo di 3 anni (2014-2016). Il numero totale di amministratori analizzati è 2.661. Per ogni amministratore sono state acquisite 26 variabili per un totale di 69,186 dati raccolti. La variabili sono state estratte guardando alle esperienze professionali e al ruolo di ogni amministratore all'interno del CDA. Precisamente, le variabili fanno riferimento alle precedenti esperienze lavorative, alle possibili connessioni generate con altre imprese, a conoscenze tecniche acquisite (commercialista, avvocato, consulente strategico e professore), al livello di educazione scolastica, l’appartenenza alla famiglia controllante, caratteristiche specifiche (genere, età e nazionalità), eventuali esperienze all’estero e altri elementi dettagliati nella tesi. Queste variabili sono chiamate “strutturate” quando sono acquisite direttamente della “relazione annuale sulla corporate governance” (art. 123- bis TUF), documento obbligatorio per le società quotate italiane e “non strutturate” quando sono state acquisite per il tramite dei curricula presentati dagli amministratori alla data di nomina. / In this dissertation I investigate the relation between board composition and the performance of family-controlled firms. The element that makes this thesis unique is that the database was entirely hand-collected, with the analysis covering the three-year period from 2014 to 2016 for a total of 2,661 directors analyzed, and 26 variables extracted for each director1. The total number of hand-collected variables for all the board members is 69,186. The board composition is measured using different variables extracted directly from the board members’ characteristics and professional experiences. The board members’ characteristics are measured in terms of previous work experiences, specific connections with other companies, work experience in specific sectors, personal characteristics, level and type of education, international experience, role and power on the board and the relation with the family (family member or not). These variables are called “structured variables” when they are collected using the table that Italian listed companies must publish every year in a report called “Corporate Governance report and ownership structure” (art. 123- bis TUF). In contrast, variables are considered “unstructured variables” when they are collected using the information provided in the directors’ curricula.

Recent research has suggested that interest alignment, i.e., the degree to which members of an organization are motivated to behave in line with organizational goals, is a source of competitive advantage that can generate rents for the firm (Gottschlag and Zollo, 2007). Drawing on agency theory, this dissertation tests whether the interest alignment premise manifests itself differently in the strategic behavior of family-controlled firms when compared to their nonfamily peers. In particular, for firms in the S&P 500, I evaluate the results of two important strategic policies; mergers and acquisitions, as well as CEO compensation practices. In studying acquisitions made by family and nonfamily firms in the S&P 500 index from 1992-2006, I find that family firms are more careful when embarking on actions leading to mergers than non-family firms, as evidenced by their selection of smaller targets and targets who are in related businesses. I also find that there is a preponderance of cash purchases by family firms that does not vary with market movements and that completion times for merger transactions are shorter than for non family firms. The care and concern with which family-controlled firms choose their "mates" translates into higher stock returns when compared with non-family firms. Overall, I believe that family-controlled firms derive value from their merger and acquisition strategy. With regard to CEO compensation practices, I find that family firms provide strong incentives to the CEO for superior performance but pay significantly lower than nonfamily firms in terms of both salary and stock-based pay. The pay-for-performance sensitivity between annual stock returns and total compensation is significantly greater for family firms in general, and for family CEOs when compared with compensation of CEOs in nonfamily firms. The pay-for-performance sensitivity is in turn positively related to firm performance, suggesting that firms with greater pay-for-performance sensitivity (family controlled firms) also perform better. The analyses in my thesis thus illustrate that family-controlled firms and non-family firms in the S&P 500 differ in their strategic decision-making. It would be fair to say that family firms have longer investment horizons and give deliberate thought to expending resources whether for acquisitions or for CEO pay, and may suffer lower agency costs than nonfamily firms due to family governance (and public monitoring) which may lead to their relative superior performance. This dissertation finds that each acquisition made by a family controlled firm generates an extra return of 0.50% when compared with a nonfamily firm, and family controlled firms earn 0.50% every year directly attributable to pay-for-performance sensitivity. The study thus underlines and reiterates the importance of instilling the long-term view in the management of all firms, lowering agency costs, and aligning the interests of managers with those of stockholders for superior financial performance / Ph. D.

本研究主要針對目前企業績效不佳，董事會成員坐領高額董監酬勞之情況進行研究。本研究首先從權力與監督兩構面分析目前影響董監酬勞水準之因素，並進一步從權力與監督構面探討執行業務董監領取員工分紅產生之激勵或稀釋效果對公司價值與股東權益之影響。 實證結果顯示，董事會成員之權力擴張會導致較高水準之董監酬勞，尤其是執行業務董監之員工分紅部分，且執行業務董監領取員工分紅對於公司股東權益及公司未來價值具有負向之影響。家族企業之董監酬勞並不會隨著權力擴張而有較高的水準。在內部監督機制方面，獨立董監之監督效果較不明顯；在外部監督機制方面，主動機構投資人相較於被動機構投資人，具有抑制董監酬勞自利行為之效果。 / Based on a sample of Taiwanese companies listed in Taiwan Securities Exchange over the period of 1996-2004, this thesis examines the determinans of compensation of board directors from the power and monitoring perspectives. In addition, this thesis investigates the effect of equity-based compensation of executive directors on firm value and return on equity. The empirical result indicates that the entrenchment of managerial power determines the level of directors’ pay, especially on equity-based compensation. The more powerful the board of directors, higher the level of compensation, lower the company value and the return on stockholders` equity. However, as compared to non-family-controlled firms, the directors of family-controlled firms tend to have lower level of compensation. Moreover, we find that active institutional investors have greater monitoring effect on the compensation level of board of directors.