Family-run companies were found to generate higher profitability compared to rivals, a report said on Thursday, claiming that involvement by “owner” families leads to good business results. (Image : Yonhap)
SEOUL, March 31 (Korea Bizwire) – Family-run companies were found to generate higher profitability compared to rivals, a report said on Thursday, claiming that involvement by “owner” families leads to good business results.
According to the report compiled by the Korea Economic Research Institute (KERI), 4,683 family-controlled firms here posted a return on asset (ROA) ratio of 3.7 percent between 2000 and 2014.
A family-controlled firm in the report is defined as family members having a stake of 20 percent or more, or two or more family members having board seats.
In contrast, 2,255 companies without such backgrounds logged a ROA ratio of minus 0.3 percent.
The report said corporate owners’ involvement in management seems to provide strong leadership and allows for fast decision-making procedures.
The report came as the country’s large family-controlled business groups, called chaebol here, have been under criticism for their murky governance structure and owners’ dogmatic decision-making procedures.’
(Yonhap)
