Customary Arbitration and Transformative Corporate Governance for Family-Owned Businesses: A Contextualist Perspective

The aim of this paper is to consider the viability of customary law-based alternative dispute resolution mechanisms for addressing disputes in family-owned businesses (FOBs). FOBs are recognised as the most dominant form of business organisation in the world and their contribution to national and global economies through localised employment, direct investment in the communities, stable working environments and preservation of tradition is widely recognised. Despite the existence of agreement in the literature regarding this, scholars have yet to undertake in-depth explorations of conflict management context of FOB governance. As the success of FOBs largely depends on how they cope with disputes and disruptions, their governance itself plays a particularly important role and should benefit from a level of research to promote their sustainable existence and socioeconomic contributions. Using a combination of several theories including access to justice, legal transplant and socioeconomic wealth, the article takes a contextualist approach to corporate governance and argues that in certain contexts, customary arbitration is pertinent for contemporary FOB disputes alongside formal Western-style corporate law and governance. The paper then outlines how customary arbitration underpinned by a differentiated approach to corporate governance can be implemented.