New Research on Corporate Governance in Large Family Firms
22nd May 2019
A new report by the IFB Research Foundation has shed new light on the corporate governance arrangements of the UK’s largest family firms. The first work of its kind in the UK the report examines corporate governance arrangements, and also provides new information on the representation of family firms among the top thousand UK companies.
The report found that 20% of the largest UK companies are family-owned, 22 of which are first generation family firms. It also found that, on average, UK family firms had larger boards than other kinds of private businesses.
Large UK family firms were found to have relatively high levels of board independence from family owners and shareholders. Family firms were likely to have lower levels of gender diversity compared to FTSE 100 companies, and to have older Board members. The average tenure of board members was under seven years.
Sir Michael Bibby, Chairman of the IFB Research Foundation:
“Better governance builds trust. The analysis in this report shows that the boards of these firms are characterised by a high degree of independence. It also draws attention to some of the ways that family firms can raise their governance standards – by increasing gender diversity in their Board and disclosing more information about their reporting practices.”
The corporate governance landscape in the UK is changing – especially for private businesses – with the introduction of new reforms at the start of 2019. The largest private companies will now be required to publish information on their corporate governance arrangements. And in December 2018 the new Wates Principles for governance in private companies were published. The first reports on this will be published from March 2020 onwards.