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Board independence and dividend distributions in listed family firms in South Africa
Thesis (MCom)--Stellenbosch University, 2024.
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| Format: | Thesis |
| Language: | en_ZA |
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Stellenbosch : Stellenbosch University
2025
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| _version_ | 1867614020633100288 |
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| access_status_str | Open Access |
| author | Dos Santos, Gabriela |
| author2 | Viviers, Suzette |
| author_browse | Dos Santos, Gabriela Viviers, Suzette |
| author_facet | Viviers, Suzette Dos Santos, Gabriela |
| author_sort | Dos Santos, Gabriela |
| collection | Thesis |
| dc_rights_str_mv | Stellenbosch University |
| description | Thesis (MCom)--Stellenbosch University, 2024. |
| format | Thesis |
| id | oai:scholar.sun.ac.za:10019.1/131645 |
| institution | Stellenbosch University (South Africa) |
| language | en_ZA |
| last_indexed | 2026-06-10T12:45:23.741Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from SUNScholar — Stellenbosch University Repository |
| publishDate | 2025 |
| publishDateRange | 2025 |
| publishDateSort | 2025 |
| publisher | Stellenbosch : Stellenbosch University |
| publisherStr | Stellenbosch : Stellenbosch University |
| record_format | dspace |
| source_str | SUNScholar — Stellenbosch University Repository |
| spelling | oai:scholar.sun.ac.za:10019.1/131645 Board independence and dividend distributions in listed family firms in South Africa Dos Santos, Gabriela Viviers, Suzette Venter, Elmarie Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management. Corporate governance -- South Africa Family-owned business enterprises -- South Africa Boards of directors -- South Africa Dividends -- South Africa UCTD Thesis (MCom)--Stellenbosch University, 2024. ENGLISH SUMMARY: Family firms (FFs) are significant contributors to economic growth and employment in South Africa. Given their substantial socio-economic impact, more researchers are showing an interest in researching various aspects of FFs. Concerns regarding internal corporate governance mechanisms, such as the independence of the Board of directors (board), have for example, received more attention from researchers in recent years. Given the distinctive ownership, management and governance dynamics of FFs, strategic decisions vary amongst FFs and when compared to non-family firms. One such decision relates to the distribution of cash dividends to ordinary shareholders. Past empirical research investigating the relationship between dividend distributions and board independence in FFs has yielded mixed results. These studies were predominantly conducted in developed economies and used traditional theoretical lenses, notably the agency theory. As far as could be determined, no academic research has been conducted to date on the link between dividend distributions and board independence among FFs listed on the Johannesburg Stock Exchange (JSE). Furthermore, existing studies lack a behavioural perspective that is especially applicable to FFs. As such, the socioemotional wealth theory and catering theory of dividends were used as additional theoretical lenses to explain the complex relationship between the considered variables. To address the identified research gaps, this study investigated the association between dividend distributions and board independence in a carefully selected sample of 34 JSE-listed FFs from 2006 to 2022. Data for the dependent, independent and control variables were collected from the Bloomberg database and annual integrated company reports. The dependent variable, dividend payments, was measured through three proxies, namely the dividend payout ratio, the propensity to pay a dividend and dividend per share. The independent variable, board independence, was examined according to the percentage of independent non-executive directors (INEDs) on a board as reported by each FF and as reclassified by the researcher based on these directors’ tenure and family association. Control variables included firm size, growth opportunities, board size, profitability, and free cash flow. Mixed model analysis of variance (ANOVA) tests reported significant changes in dividend per share and the percentage INEDs as reported and as reclassified over time. Panel regressions revealed a negative relationship between dividend distributions and board independence at the sampled FFs. Consequently, enhanced independence of the board may not alleviate minority shareholder wealth expropriation as proposed by some theories, but rather act as a substitute monitoring mechanism for dividend distributions. The significant increase in board independence over the research period suggests that FFs are heeding the recommendations of corporate governance policy makers in South Africa. Dividend distributions fluctuated over the research period. One of the foremost recommendations of this study is that educators and researchers in the field of commerce provide more in-depth training on FF governance. As most corporate governance codes are agency-based, they tend to ignore the benefits of having family members in top decision-making roles. This investigation revealed several unique corporate governance characteristics present in FFs that could be regarded as a competitive advantage rather than a concern for non-family shareholders and other key stakeholders. Given that FF-related research in South Africa among listed companies is still relatively novel, this study contributed to the body of knowledge and encourages future researchers to further explore this field. AFRIKAANSE OPSOMMING: Familieondernemings (FOs) lewer ‘n beduidende bydrae tot ekonomiese groei en indiensneming in Suid-Afrika. Gegewe hul wesenlike sosio-ekonomiese impak, is daar ‘n toenemende aantal navorsers wat belangstelling toon om bepaalde aspekte van FOs na te vors. Kommer oor interne korporatiewe bestuursmeganismes, soos die onafhanklikheid van die Raad van direkteure (raad), het byvoorbeeld gelei tot ‘n toename in navorsing oor hierdie onderwerp. Gegewe die unieke eienaarskap en bestuursdinamika van FOs, strategiese besluite van die ondernemings is dikwels verskillend tussen familieondernemings en wanneer vergelyk word met nie-familieondernemings. Een so 'n besluit hou verband met die uitkering van kontant dividende aan gewone aandeelhouers. Vorige empiriese navorsing wat die verband tussen dividenduitkerings en die onafhanklikheid van direksies in FOs ondersoek het, het gemengde resultate gelewer. Hierdie studies is hoofsaaklik in ontwikkelde ekonomiee gedoen en het meestal gebruik gemaak van tradisionele teoriee, soos die agentskapsteorie. Sover vasgestel kon word, is daar tot dusver geen akademiese navorsing gedoen oor die verband tussen dividenduitkerings en die direksie-onafhanklikheid van FOs wat op die Johannesburgse Effektebeurs (JSE) genoteer is nie. Voorts, bestaande navorsingstudies neem nie 'n gedragsperspektief, wat veral op FOs van toepassing is, in ag nie. As sodanig is die sosio-emosionele welvaartsteorie en die aanpassingssteorie van dividende as bykomende teoretiese lense in hierdie studie gebruik om die komplekse verband tussen die gekose veranderlikes te verduidelik. Om die geïdentifiseerde navorsingsgapings aan te spreek, het hierdie studie die verband tussen dividenduitkerings en die direksie-onafhanklikheid ondersoek deur gebruik te maak van 'n noukeurig geselekteerde steekproef van JSE-genoteerde FOs van 2006 tot 2022. Data vir die afhanklike, onafhanklike en beheerveranderlikes is versamel uit die Bloomberg-databasis en jaarlikse geïntegreerde maatskappy verslae. Die afhanklike veranderlike, dividendbetalings, is deur drie maatstawwe gemeet, naamlik die dividenduitbetalingsverhouding, die geneigdheid om ‘n dividend te betaal en dividend per aandeel. Die onafhanklike veranderlike, direksie-onafhanklikheid, is gemeet volgens die persentasie onafhanklike nie-uitvoerende direkteure op 'n direksie soos gerapporteer deur die onderskeie FOs en soosge-herklassifiseer deur die navorser op grond van hierdie direkteure se ampstermyn en familieverwantskap. Beheerveranderlikes het die grootte van die maatskappy asook die direksie, groeigeleenthede, winsgewendheid en vrye kontantvloei ingesluit. Gemengde modelanalise van variansie (ANOVA) toetse het beduidende veranderinge in dividend per aandeel gerapporteer asook in die persentasie onafhanklike direkteure soos gerapporteer en ge-herklassifiseer. Paneelregressies het 'n negatiewe verband tussen dividenduitkerings en direksie-onafhanklikheid by die gekose FOs aan die lig gebring. Gevolglik kan die toenemende onafhanklikheid van die Raad van direkteure nie die onteiening van minderheidaandeelhouerswelvaart verlig nie (soos deur sommige teoriee voorgestel), maar eerder dien as 'n plaasvervangende moniteringsmeganisme vir dividenduitkerings. Die beduidende toename in direksie-onafhanklikheid gedurende die navorsingsperiode dui daarop dat FOs gehoor gee aan die aanbevelings van beleidsmakers van korporatiewe bestuur in Suid-Afrika. Dividenduitkerings het oor die navorsingsperiode gewissel. Die belangrikste aanbeveling van hierdie studie is dat opvoeders en navorsers in die handelsveld meer diepgaande opleiding rakende FO bestuur verskaf. Aangesien die meeste korporatiewe bestuurskodes op die agentskapteorie gebasseer is, is dit geneig om die voordele van familielede in top besluitsnemingsrolle te ignoreer. Hierdie studie het verskeie unieke korporatiewe bestuurseienskappe van FOs aan die lig gebring wat as 'n mededingende voordeel eerder as 'n bekommernis vir nie-familie aandeelhouers en ander kern belanghebbendes beskou kan word. Aangesien FO-verwante navorsing in Suid-Afrika onder genoteerde maatskappye nog relatief nuut is, het hierdie studie bygedra tot die vakkennis en moedig toekomstige navorsers aan om hierdie veld verder te verken. Masters 2025-02-03T10:03:45Z 2025-02-03T10:03:45Z 2024-12 Thesis https://scholar.sun.ac.za/handle/10019.1/131645 en_ZA Stellenbosch University xiv, 181 pages : illustrations, includes annexures application/pdf Stellenbosch : Stellenbosch University |
| spellingShingle | Corporate governance -- South Africa Family-owned business enterprises -- South Africa Boards of directors -- South Africa Dividends -- South Africa UCTD Dos Santos, Gabriela Board independence and dividend distributions in listed family firms in South Africa |
| title | Board independence and dividend distributions in listed family firms in South Africa |
| title_full | Board independence and dividend distributions in listed family firms in South Africa |
| title_fullStr | Board independence and dividend distributions in listed family firms in South Africa |
| title_full_unstemmed | Board independence and dividend distributions in listed family firms in South Africa |
| title_short | Board independence and dividend distributions in listed family firms in South Africa |
| title_sort | board independence and dividend distributions in listed family firms in south africa |
| topic | Corporate governance -- South Africa Family-owned business enterprises -- South Africa Boards of directors -- South Africa Dividends -- South Africa UCTD |
| url | https://scholar.sun.ac.za/handle/10019.1/131645 |
| work_keys_str_mv | AT dossantosgabriela boardindependenceanddividenddistributionsinlistedfamilyfirmsinsouthafrica |