Understanding the Interplay of Family Ownership, Board Composition, and Performance in Unlisted Family Businesses

Family-owned businesses are the backbone of many economies across the world. Growing expansion and globalisation have presented several obstacles to family enterprises. How you handle them can spell the difference between success and failure. In addition, some essential systematic evaluations have recognised that studies on listed family firms against unlisted family enterprises have attracted significant scholarly attention in the context of Interlocking Directorates and performance. This is a pity because unlisted family businesses account for a large share of the economic landscapes of both emerging and industrialised countries. The current study aimed to investigate the relationship between family ownership, board composition and performance of the family businesses. This study used the PRISMA statement 2020 to include and exclude the articles. In addition, we used the VOS viewer software to determine major classifications of data streams for the analysis. The results show that four significant research areas in prior research have been conducted, interlocking directorates, family ownership, board composition and performance of the unlisted firms. The findings indicate that interlock directors positively impact the firm performance of unlisted family firms. The unlisted firms showed a significant presence of board directors (which might have been due to their more excellent knowledge of the firm) with a subsequent positive effect on strategic planning decisions. It is also important to note the differences between family firms run by the first generation and those run by subsequent generations. The presence of independents and affiliates on the board positively affects performance when the first generation runs the firm. Moreover, our findings provide a new perspective on board directors’ role in the corporate governance of unlisted family firms.