An Analysis of Majority Owner-Managed Companies in the UK
46 Pages Posted: 7 May 2004
Date Written: January 12, 2004
This paper investigates the characteristics of 73 UK firms in which managers have an ownership greater than fifty percent. We find that majority owner-managed companies make less use of alternative corporate control systems and are less likely to remove their CEO or other board memebers following poor performance. In contrast to other firms, these companies do not appear to suffer as a result and there is evidence that majority owned firms outperform other similar companies. The determinants of majority control appear more closely related to the characteristics of the controlling shareholders rather than the firm's operating environment. Changes in the ownership structure of our sample is more closely related to changes in owner-specific characteristics and equity issuance than they are to changes in firm-specific characteristics and company performance.
Keywords: Corporate Governance, Majority, Owner Managed, Corporate Control
JEL Classification: G32
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