Picture of wind turbine against blue sky

Open Access research with a real impact...

The Strathprints institutional repository is a digital archive of University of Strathclyde research outputs.

The Energy Systems Research Unit (ESRU) within Strathclyde's Department of Mechanical and Aerospace Engineering is producing Open Access research that can help society deploy and optimise renewable energy systems, such as wind turbine technology.

Explore wind turbine research in Strathprints

Explore all of Strathclyde's Open Access research content

An analysis of majority owner-managed companies in the UK

Hillier, David and McColgan, Patrick (2008) An analysis of majority owner-managed companies in the UK. Accounting and Finance, 48 (4). pp. 603-623. ISSN 0810-5391

Full text not available in this repository. (Request a copy from the Strathclyde author)

Abstract

This paper investigates the characteristics of 73 UK companies in which managers have an ownership stake of greater than 50 per cent. We find that majority owner-managed companies make less use of alternative corporate control systems and are less likely to remove their chief executive officer or other board members following poor performance. However, our sample firms actually outperform diffusely held companies of similar size in the same industry. The determinants of majority control appear more closely related to the characteristics of the controlling shareholders rather than the firm's operating environment. Changes in the ownership structure of our sample companies owe more to changes in owner-specific characteristics and security issuance than they are related to changes in the company's operating environment or company performance. We conclude that despite the obvious agency costs of managerial entrenchment for closely held companies, for the present sample at least the incentive alignment benefits of large director shareholdings are beneficial to outside shareholders