Relationship Between Governance, Stage of Succession and Legal Personality in Farm Family Businesses

Abstract

As the farm family business grows, the owner faces the family succession issue. Nevertheless, owners still face the challenge of remaining competitive in the sector. At this point, the professionalization of the business through the adoption of corporate governance practices becomes part of the management repertoire. In this context (succession and governance), we must not neglect the legal personality of the enterprise, which is still a challenge for most farm businesses in Brazil. Under the scope of the fundamentals of "Corporate Governance", "Family Succession", and "Legal Personality", this study proposes and discusses these three dimensions for the management of farm businesses comprehensively. It aims to investigate the relationship between the adoption of corporate governance practices, the stage in the succession process, and the legal personality of farm family businesses. It is a multi-case study with farm businesses from the state of Mato Grosso do Sul. This study was developed using in-depth interviews with a non-probabilistic sample by convenience. The sample comprised six farm businesses. Based on this study's evidence, we identified a relationship between corporate governance, succession, and the legal personality of farm businesses. Furthermore, we underline the need for an integrative analysis, from which it is possible to propose a set of assumptions with theoretical and managerial implications.