Governance in family firms: how to ensure continuity

Family firms play a key role in the world economy, yet their success is often plagued by family-related issues and conflict. Succession is one of the most critical hurdles they face. The purpose of this paper is to illustrate how specific governance instruments, such as the family protocol, can aid mitigate the conflicts by establishing a set of guidelines and procedures to aid govern the operation, management and continuity of family firms. To study the underlying strategic decision making process of the multiple stakeholders involved, this paper resorts to game theory. The results will provide valuable determinants of the family protocol which may aid smooth managerial transfer in the family firm and uphold harmony in the family setting.