Question 2 a) Family business operate differently that other forms on business organization since there is different ownership structure

Question 2

a) Family business operate differently that other forms on business organization since there is different ownership structure. The growth of the family business stemmed from their long existence in the market which has garnered brands and reputation, skills and expertise as well as control over the market growth products and services. In family firms, there is no separation between managements and shareholders. Nonetheless, conflicts may exist when Chief Executive Officer makes decision for the interest of family members instead of all the stakeholders. Nonetheless, due to limited capital, family firms may opt for issuing the company shares in the stock exchanges. Under the Bursa Malaysia listing requirements, firms that are listed in the stock exchange must appoint independent directors on the board. However, in a tight family firm with few disclosures, this can be challenging. Based on this scenario, distinguish between the governance of a family-owned company and a publicly listed company, and explain the issues commonly experience by family firms.