Addressing the theory-practice divide in family business research: The case of shareholder agreements

•We present a conceptual analysis and classification of family shareholder agreements.•We theorize on the effects that different types of shareholder agreements have on the family business system.•We identify the family's value and goal system and its level of maturity as key sources of business family heterogeneity.•We propose a Family-Practice Fit framework.•We theorize that the level of fit between the two plays a key role in attaining family unity and business continuity. The ultimate aim of family business research is the production of new actionable knowledge, that is rigorous, empirically verified recommendations that fit family business needs and benefit their business practice. Oftentimes, however, research efforts fall short in meeting this goal, leaving family business owners and managers with limited guidance other than anecdotal evidence, best practices, and other forms of “conventional” or “folk” wisdom. We address this theory-practice divide in family business research using the example of shareholder agreements. We present a theoretical analysis of the characteristics, antecedents and effects of shareholder agreements on family business outcomes using the concept of family-practice fit, suggesting that characteristics of the owning family, which are expressions of family heterogeneity, should be aligned with the practices used to manage the family, and its intersection with the business in order to facilitate goal attainment. In focusing on the family as a unit of analysis, our conceptualization follows the calls for a more nuanced understanding of the family behind the firm, providing a foundation upon which future research on shareholder agreements and other widespread family business practices can build.