Executive Takeaways
■ Managerial decisions that do not maximize shareholder wealth lead to lower stock returns. ■ Major stockholders’ actions unfavorable to minor shareholders can lower stock returns.
■ Existence of these two types of agency conflicts in family business firms is identified. ■ A diminished stock price could make the firm a takeover target.
Rajaram Veliyath, Professor, Associate Dean of Research & Graduate Programs
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