Shareholder families.

Summary Family firms represent a large proportion of the world's listed companies. The governance mechanisms of family firms take into account the specificities of their agency conflicts. For example, agency conflicts between shareholders and managers can be mitigated when the managers are themselves family members. The costs of agency conflicts between the majority family block and minority shareholders, linked to potential private profit taking, can be offset by more effective control of managers, while a specific agency conflict linked to the relations between the family as a whole and those who represent it in the organization of the shareholder block can emerge. The governance mechanisms put in place seem to be effective, since family firms appear to perform better than non-family firms. But they are also less diversified, less innovative and more sensitive to the social climate in the firm. Their financial decisions reflect the concern of their family shareholders to preserve their control, which involves in particular the establishment of long-term relationships with the firm's other stakeholders. This article provides a synthesis of research findings on these topics.