Experienced injustice in family governance processes causes frustration and tension among owners in family firms

In her thesis, Lena Jungell has investigated how families deal with situations where the mutually agreed-upon policies are ignored or interpreted in different ways. Whereas a firm functions by legally binding governance principles and regulations, agreements within an owning family concerning managing the shared ownership are based on social relationships, family norms and traditions.

Governing an owning family consisting of a heterogenous group of individuals in several generations with needs and expectations of their own is a considerable challenge for many families.

"A family governance system is often developed for enhancing cohesion and facilitating communication within the owning family. Nevertheless, even with a well-planned governance structure, owning families still encounter challenges with differing opinions and experiences of unfairness” claims Jungell.

Aligning the conduct of the owning family tends to work as long as the mutual guidelines are respected by all. However, as in the case of family governance, where the mutual guidelines are only morally, not legally, binding, people are not forced to comply with them. In a worst-case scenario, that causes unclearness, frustration, tension and mistrust, which in turn easily affects the management and other stakeholders outside the family.

You can read the whole thesis here:
Family Governance : Managing Dispersed Ownership Within the Owning Family Through Procedural Justice

Lena Jungell will defend her thesis on 19 October , at 14.00 in Hanken School of Economics, auditorium Futurum, Arkadiankatu 22, Helsinki.

The doctoral defence will be held as hybrid. Participants can attend on site or via videoconference. Access the video conference via the link here

Opponent: Professor Joseph H. Astrachan, Kennesaw University, USA
Custos: Professor Joakim Wincent, Hanken School of Economics

More information:
Lena Jungell
+358 400624059
lena.jungell@hanken.fi