In this dissertation, Essay 1 draws upon agency theory and corporate governance to classify control enhancing corporate governance provisions and to examine the use of these provisions within the context of publicly traded family firms. I argue that publicly traded family firms will differ from publicly traded nonfamily firms in terms of the frequency of the use of different types of control enhancing governance provisions. Specifically, I argue that family ownership will influence the frequency of the use of provisions and family management will moderate the relationships between family ownership and the frequency of the use of governance provisions. I develop and test the hypotheses on a sample of 386 of S&P500 firms. Findings do not support the hypothesized relationships. A rationale for the non-significant relationships is also provided. In Essay 2, drawing upon agency theory and the extant family governance literature, I examine the link between family involvement, the use of governance provisions, and firm performance. I suggest that the frequency of the use of different types of control enhancing governance provisions differentially influence the relationship between family involvement (i.e. family ownership and family management) in the business and firm performance. I develop and test the hypotheses on 386 of the S&P500 firms. Findings support the hypotheses suggesting the moderation effects of (a) the frequency of the use of provisions protecting controlling owners in terms of their sustainability of controlling status on the inverted u-shaped relationship between family ownership and firm performance, (b) the frequency of the use of provisions protecting management legally on the inverted u-shaped relationship between family ownership and firm performance, (c) the frequency of the use of provisions protecting controlling owners in terms of their voting rights on the inverted u-shaped relationship between family management and firm performance, (d) the frequency of the use of provisions protecting noncontrolling owners on the inverted u-shaped relationship between family management and firm performance, and (e) the frequency of the use of provisions protecting management monetarily on the inverted u-shaped relationship between family management and firm performance. Finally, results, future research directions, and implications for practice are discussed.

Family-owned enterprise is a typical governance structure around the world. In addressing the governance issues in family business, the founding family usually utilizes the direct or indirect ownership structure and also the management design to mitigate the typical agency-principal problem among founding family and the professional managers in family businesses. However, scholars indicate that the majority shareholders, such as the founding family in a family business, will induce the principal-principal agency concern, and also have the possibility to exploit the minority shareholder¡¦s interests in publicly traded family businesses. Thus, the corporate governance today will not only focus on mitigating the typical agency-principal problem, but also the principal-principal agency problem in family businesses. This study tries to examine the role of the internal audit¡¦s independence in addressing the performance issues in publicly traded family businesses in Taiwan. From the agency theory viewpoint, this study try to utilize the questionnaires method to estimate the degree of the internal audit¡¦s independence, and future examine its performance impact in family businesses in Taiwan. This study suggests that the internal audit power, and the internal audit independent execution, can be two kinds of independence indexes in estimating the degree of internal audit¡¦s independence. The results indicate that the internal audit¡¦s independence will generate direct and moderated impact on publicly trade family business¡¦s performance in Taiwan. Specifically, the more independent board of directors a family business has, the better performance that this focal firm behaves. Moreover, the internal audit¡¦s independence will generate positively direct impact on firm performance in a family business. Additionally, the degree of internal audit¡¦s independent execution will moderate the positive impact from independent board of directors and family leadership on firm performance in publicly trade family businesses in Taiwan. This study provides referable values in estimating the internal audit¡¦s independence in publicly trade businesses. And it also provides theoretical and practical implications in addressing governance issues in family businesses in Asia.