Governance as a concept is “concerned with the resolution of conflicts of interest between various claim holders”. Most structures of corporate governance have been tested on public firms, which have multiple stakeholders and the role of the board is quite different. In family firms, governance refers to the series of mechanisms which further the family's mission and goals, and include formal structures, procedures, regulations, and agreements as well as informal structures such as shared family values, culture, beliefs, and traditions. The application of family governance procedures has been shown to improve the firm's financial success.
