We explore the process of professionalization pre- and post-buyout (MBO) or buyin (MBI) of former private family firms using longitudinal evidence from six UK family firms undergoing an MBO/I in 1998. Professionalization behaviour was monitored up to 2014. Previous studies have conceptualized professionalization as a threshold to be attained. We demonstrate that professionalization is a complex process occurring in waves, triggered by changes in firm ownership and management. Waves of professionalization converge during the MBO/I process. Buyouts provide a funnelling mechanism enabling diverse control systems to be standardized. Post-MBO/I, divergence in the professionalization process reoccurs contingent on firm-specific contexts. Professionalization focuses on operations when stewardship relationships predominate, but on agency control mechanisms when there is increased potential for agency costs. Buyout organizational form is an important transitory phase facilitating the professionalization process. Professionalization is not a once-for-all development stage

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Combining a behavioral agency perspective with research on multiple agency conflicts, this paper examines factors affecting the implementation of equity based incentive schemes in initial public offerings (IPOs). Using a unique sample of UK IPO companies between years 1998 and 2002, it shows that conditional (performance-related) incentive schemes are negatively associated with share ownership and board power of the IPO's founding directors. However, the retained ownership of venture capital firms is positively associated with the probability of conditional incentive schemes. Board independence weakly effects on the "toughness" of executive compensation. The papers interesting findings suggests a number of avenues for a future analysis of governance development process in "threshold" firms.

Combining a behavioral agency perspective with research on multiple agency conflicts, this paper examines factors affecting the implementation of equity based incentive schemes in initial public offerings (IPOs). Using a unique sample of UK IPO companies between years 1998 and 2002, it shows that conditional (performance-related) incentive schemes are negatively associated with share ownership and board power of the IPO's founding directors. However, the retained ownership of venture capital firms is positively associated with the probability of conditional incentive schemes. Board independence weakly effects on the "toughness" of executive compensation. The papers interesting findings suggests a number of avenues for a future analysis of governance development process in "threshold" firms.

No abstract