President interlocking, family firms and performance during turbulent times: Evidence from Latin America

How Can Responsible Family Ownership be Sustained Across Generations? A Family Social Capital Approach

“…The ownership structure and corporate governance mechanisms in Mexico, as in other Latin American countries, differ from those in Anglo Saxon nations, as noted by Watkins-Fassler et al (2017). Additionally, social cohesion is particularly robust in Latin American countries (Mizruchi 1996) and members of owning families interrelate among themselves as part of the same social network.…”

Desempeño financiero de empresas familiares vs. empresas no familiares en México

“…In specification 2, Board independency also appears to negatively impact firm performance. Although this is an uncommon outcome in the literature, it is not surprising as in Mexico the definition of independency does not take into account the fact that Board members tend to be related to other firms of the same business group (Watkins et al, 2017). As stated by Valenti and Horner (2010), this type of interlocking directorates allow a specific group of company owners, managers, chairs of the Boards, and other directors to unify corporate policy and concentrate power, which facilitates not the interests of the company itself, but rather the interests of particular directors.…”

Board composition and bank performance in a small island developing state: The case of Curacao

“…It was observed that the maximum number of simultaneous directorship seats taken by the same person is two, which abolishes the arguments of busy boards and their negative impact on firm performance. On the contrary, Multiple Directorships provide locally generated banks in Curacao with valuable human capital and other resources, which favor decision-making processes and reduce information asymmetries and agency costs (Watkins-Fassler et al, 2016). In this respect, Central Banks -including the Central Bank of Curacao and Sint Maarten -should dictate concerning Multiple Directorships.…”

“…Multiple Directorships bring forward Busy Boards, which deteriorate Corporate Governance by overstretching directors, with a negative effect on the decision-making process and Firm Performance (Fich & Shivdasani, 2006). On the other hand, some authors argue that it has a positive effect by improving access to relevant information and other valuable resources that help firms to adapt and reduce uncertainty concerning strategic actions (Howard, Withers, & Tithanyi, 2016;Watkins-Fassler, Fernández-Pérez, & Rodríguez-Ariza, 2016). Chen (2008) concludes that in "firms with high growth opportunities (likely having greater needs for advising and finance) and low agency conflicts (likely having less need for monitoring), Multiple Directorships could be a source of beneficial advising, which improves board functions and Firm Performance.…”

“…This is expressed through a dummy variable, being 1 if there is Multiple Directorships and 0 if this is not the case. This operational definition has been employed in previous studies, such as in Watkins-Fassler et al (2016).…”