The Handbook of Board Governance

37Boards and Value Creation in Family FirmsAn Extended Team Production Approach

Jonas Gabrielsson

Associate Professor, Business Administration, Halmstad University, Sweden

Andrea Calabrò

WIFU-Foundation Chair of Business Administration and Family Entrepreneurship, Witten Institute for Family Business, University of Witten/Herdecke, Germany Visiting Professor, University of Rome Tor Vergata, University of Rome La Sapienza, and University of Bergamo

Morten Huse

Professor, BI Norwegian Business School, Norway

Family firms are widely acknowledged as forming the backbone of the global entrepreneurial economy as they represent a dominant economic and social force worldwide (La Porta, Lopez-de-Silanes, and Shleifer 1999; Morck and Yeung 2003). Their unique governance features, where family members often serve as both owners and managers, have traditionally led to limited involvement for the boards of directors in these firms. Instead, their boards are typically described as largely passive entities with limited power and influence on organizational decisions and outcomes (Bammens, Voordeckers, and Van Gils 2011). However, global competition, together with increasingly complex governance environments, have put concurrent pressures on business leaders to develop the value creative potential of their boards. This has led to an increasing interest and attention to theoretical approaches and analytical models that can provide actionable knowledge of how boards contribute to value creation ...