1ST REPORT BANCA MARCH-IE: The creation of value in European listed family companies (2001-2010)

The study analyzes the creation of value of 2,423 companies listed on various European stock exchanges during the period 2001-2010. The results of the study leave no doubt: European listed family companies have created more value for their shareholders during the period analyzed. By controlling for other factors that could be affecting the creation of value in any of its aspects, such as size, debt level and sectoral risk or distribution, this results clearly show the existence of a “family effect” that has a positive influence on the long-term creation of value for shareholders in the case of European listed companies.

 

2ND REPORT BANCA MARCH-IE: The family premium in European listed companies

Based on the higher profitability of family companies as compared to non-family companies (i.e. the “family premium”), the study identifies the factors that contribute to maximizing the family premium. The study demonstrates that institutional context matters, as the family premium is higher in Germany and the United Kingdom than in other European countries. There are also significant differences across sectors, with the family premium being most significant in sectors such as textile and automobile. In addition, it was demonstrated that the advantages of family control are more obvious in smaller listed companies (those with a market capitalization under €350 million). Finally, the study shows that despite their greater profitability, listed family companies are lower rated, which suggests that the market “penalizes” some risks associated with family ownership.

 

3RD REPORT BANCA MARCH-IE: Corporate governance in listed family companies

This study analyzes the corporate governance practices of 1,200 companies listed on European and American stock markets with the aim of determining the situation of family companies in relation to non-family companies in terms of corporate governance. The results show that family companies comply to a lesser extent with the good governance recommendations contained in the governance codes for listed companies, though the situation differs depending on the geographical area. Family companies in the United States and the United Kingdom remain a step behind non-family companies in terms of governance, but their situation is much better than their counterparts in the other European countries included in the sample. The results of the report also prove that making an effort to improve corporate governance is a profitable investment for family companies, since companies with above-average corporate governance have higher returns than others. If the previous reports demonstrate that the combination of “family company” and “listed company” brings together the best of both worlds, this 3rd report demonstrates that adding “company with good governance” to the equation substantially improves the family premium.