This article suggests several important policy
implications. Companies with concentrated ownership
should focus on monitoring CG mechanisms, i.e.
boards of directors should have a greater degree of
independence. Although family firms tend to prefer
to control their boards, it may be beneficial to reduce
the number of directors who are family members to
increase the firm’s value. The importance of monitoring
mechanisms supports regulatory authorities
making policies that encourage greater board independence
and higher minimum qualifications for
directors.