Family Businesses and Corporate Governance in Serbia

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

Kluyver, C. (2013). A primer on corporate governance (2nd ed.). New York, NY: Business Expert Press.

This week’s readings take us on a journey through the makings of a successful multigenerational family business. I personally noticed a few of the same themes from class in the readings, two primarily. The first was the processes and concepts a family can include in their business model that allow the company to run as efficiently as possible (such as deliberating on share distribution, holding family meetings, or implementing a non-family board). The second was the steps that current generation leaders should take to prepare the next generation, and the qualities to look for in the next generation. These two themes, as discussed in class, were the main themes in Chapters three and four of Poza’s book.

While expanding and becoming more complex, the family businesses always face challenges. The founder followers will increase after every successive generation. Problems will increase and the commitment toward the business will decrease. All this will result on the capability to keep the business growing and the profitability increasing. The article states five attributes to endure a successful family business.

The focus of the family leadership was on rewarding and valuing the family's work of wealth creation, rather than on the development of the family as a community that supported the values of the family. There were no roles for family members to serve the family if they were not in the business, and only a few could find a suitable position in the business. (Jaffe,

Experience shows 90% of family and small businesses generally fail, because of lack of leadership, decision making, or to become fully professional and competitive in the market. It is on Mr. Pacheco’s shoulders, as the family business leader, this decision rest, to keep the existing path – or - grow and prosper with a new structure.

International Business – Finance Corporate Governance and Restructuring Course Code: EBC4052 Tutor: Dr. S. Kleimeier

The following paper will compare and contrast corporate governance in the U.S. and European Union. Because corporate governance regulations are not yet uniform across all EU countries, we have chosen to examine Poland in particular. We will first present U.S. corporate governance and the Sarbanes-Oxley Act of 2002, and then examine how Poland's corporate governance regulations compare. Finally, since we have already learned about Corporate Social Responsibility for U.S. companies, we have examined Corporate Social Responsibility in Poland, looking specifically at the largest airline in Poland, LOT.

The world has witnessed a series of corporate bankruptcies in the recent decades like Enron, Lehman Brothers Inc, Global Crossings, and Tyco in the USA; HIH in Australia, Parmalat in Italy, APP in Asia, and Islamic bank Ltd. of South Africa. These collapses have weakened and shaken the confidence of shareholders, debtors, governmental institutions, and other similar relevant stakeholders in corporate governance (CG) and the stock markets, and led to regulating many reforms and codes of best governance practices all over the world, to strengthen transparency and restore confidence in financial markets (Barros et al., 2013). For instance, after the financial failure of Enron and dissolution of Arthur Anderson; one of the five largest audit and accountancy partnerships in the world, U.S enacted the Sarbanes-Oxley act of 2002; France regulated the financial security law of 2003, as many other countries developed a set of regulations in the aftermath of huge corporate scandals. In Addition, the integration and globalization of financial markets also has given significance and highlighted the importance of CG as claimed by Srinivasan & Srinivasan (2011).

After studying 2,004 family firms, researchers Barbera and Hasso stated: “of all family SMEs (small-medium enterprises), nearly 89% have used an external accountant.” This has shown

Businesses operating as family holdings or small businesses have various common practices considered effective towards organizational performance. While small businesses may at times be viewed by outsiders to be easy to run, they subject the owners and managers to the same kind of business stresses that large businesses present. This makes it imperative to apply various basic principles of management, marketing and conflict resolution strategies that are also applicable in large businesses. Through interviews, some information was collected on running various types of small businesses in order to determine the

Corporate governance refers to ‘the ways suppliers of finance to corporations assure themselves of getting return on their investment’ (Shleifer and Vishny, 1997: 736). Corporate governance discusses the set of systems, principles and processes by which a

Giovanni D’Orio, Department of Economics and Statistics, University of Calabria – Rende (CS) Italy. Contact:

Family enterprises “constitute 80–98% of all businesses in the world’s free economies” (Poza & Daugherty , 2014, pp. 4).To further specify, these companies employ a very large number of individuals globally and they have “ a massive impact of the economy as a whole”(Astrachan & Shanker ,2003). This emerging field of study reveals a unique point of view aspect to the study of businesses accompanied with a matchless competitive advantage when taken into consideration.

Recently, family firms have been the talk of various studies across different fields such as accounting, finance, and management. This is most probably due to the fact that family firms account for the majority of business and employment worldwide (Tharawat, 2014). At the same time, most family firms have specific characteristics and practices that studies have yet to dwell on. While these and other considerations have recently led to more research on management accounting and management control in family firms, research on this topic is only recently becoming an independent field of study on developing countries that are actually affected by it more than other countries (Barnato, 2014). Thus, this study aims to shed more light on