Family governance oversight, performance, and high performance work systems

Recent analyses of U.S. public family firms (PFFs) show that family firms outperform other forms of organization. However, scholars call for more studies to determine why PFFs outperform the market. High performance work systems (HPWSs) reflect the extent to which an organization adopts and implements a strategic approach in HRM practices and could be why PFFs outperform. Using the stewardship perspective, agency theory, and the resource-based view of the firm, this study empirically examines the relationship among family governance oversight, HPWS, and performance at PFFs. Using a sample of 159 Taiwanese public firms, the empirical results indicate that independent directors on the board and the level of family member board participation associate with HPWS adoption. Adopting HPWS also mediates the effect of independent directors and subjective firm performance. This finding has both theoretical and practical implications.