LONDON (Reuters) - Publicly-traded family firms are falling behind in a global push to boost corporate governance standards at listed companies, research showed on Tuesday, hurting their traditional ability to outperform rivals without family ties.
Companies founded, managed and part-owned by successful entrepreneurial families have garnered a reputation for delivering stronger returns than other listed firms in recent years, thanks in part to the perception of a closer alignment of interests with external shareholders.But a report by Spain's IE Business School and Banca March analyzing governance benchmarks at 265 family firms (FFs) and 861 non-family firms (NFFs) in Europe and the United States between 2008 and 2013 showed the former were on aggregate more poorly governed than the latter.As a result of low corporate governance scores, the family-run firms were delivering a smaller so-called "family premium" than their better-managed peers.The compound annual return achieved by FFs over the six-year period was 12.8 percent compared with 10.4 percent for NFFs, although the best-governed FFs generated 20 percent compared with 12 percent for all other companies in the sample.The family firms who scored highly on the report's corporate governance metrics include Spain's Inditex