Entrepreneurship Theory and Practice 2024

When Do Shareholder Agreements Add Value? Mitigating Superprincipal-Agency Conflicts in Family Firms

Peter Jaskiewicz¹; François Belot^2,3,4; James G. Combs^5,1; Emmanuel Boutron⁶; Céline Barrédy⁶

¹ University of Ottawa · ² Centre National de la Recherche Scientifique · ³ Université Paris Sciences et Lettres · ⁴ Université Paris Dauphine-PSL · ⁵ University of Central Florida · ⁶ Université Paris Nanterre

Abstract

Researchers are divided on whether shareholder agreements (SAs) improve or hurt firm value. We offer family firms as a context where SAs add value and explain why; SAs limit “superprincipal” agency conflicts between family owners and other family members. A panel of French firms and a second study of French Initial Public Offerings show shareholders value SAs more in family than in nonfamily firms. Among family firms, SAs add greater value when weak governance undermines family owners’ resistance to other family members’ demands. Our study helps reconcile competing theory about SAs and distinguishes superprincipal conflicts from other family-firm agency problems.

DOI

10.1177/10422587241238006

Sources

openalex