Abstract

LAGOS CORTES, Diógenes; BETANCOURT RAMIREZ, Jose  and  GOMEZ BETANCOURT, Gonzalo. RELATIONSHIP BETWEEN CORPORATE GOVERNANCE, FAMILY CONTROL AND FINANCIAL PERFORMANCE IN COLOMBIAN COMPANIES. Innovar [online]. 2018, vol.28, n.69, pp.85-98. ISSN 0121-5051.  https://doi.org/10.15446/innovar.v28n69.71698.

Corporate governance seems to have a positive effect or business performance as a tool to minimize agency problems. This paper studies the relationship between corporate governance, family control and financial performance in Colombian companies. Through the generalized method of moments (GMM), this relationship was estimated in a balanced data panel for 104 companies registered in the National Registry of Securities and Issuers (RNVE, in Spanish) during the 2008-2014 period. Analyzed companies were classified as a family business (FB) when a family was identified as majority controlling shareholder. Performance was measured by the return on assets (ROA) and the return on equity (ROE). The 41 practices recommended in the Country Code were used in order to measure the corporate governance level. It was found that only those practices referring to the board of directors are related to ROA, while in the case of the ROE no evidence of any of the corporate governance practices was found. Regarding the family character, it was found that when a family is the first controlling shareholder companies show a higher performance. However, no relationship with performance was observed when the first two controlling shareholders are families.

Clasificación JEL: L25, G30, G34.

Keywords : Financial performance; family business; endogeneity; GMM; corporate governance; board of directors.

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