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The paper examines, that there are inconsistent results about family business financial performance. Less agency cost is a plausible explanation when family businesses perform better than non-family businesses. Nonetheless minimizing agency cost through trust and strong social and emotional bonds in the family can lead to lower financial performance in several cases, because control is less strong. This way self-interested goals of family members lead to less good performance of the whole business. So less agency cost is not enough to make a general explanation. In stewardship theory the manager is not self-interested, but a long term oriented altruist. Based on strong social and emotional bonds the manager wants to follow financial and non-financial goals according to the needs of the family. Therefore, in the frame of stewardship theory performance can be lower in several cases, because resources are used up for non-financial goals. Both agency and stewardship theory says managers avoid risks for short or long term goals. In behavioural agency model family business managers is not seen as risk avoiders. Instead they avoid loss even if it means riskier decisions. They preserve the socioemotional wealth of the family, what is the most important capital for them. Family businesses in benign environment can follow long term non-financial goals. However, the manager is able to act as a homo economicus in a hostile environment, when socioemotional wealth is endangered. Behavioural agency model can explain why family business performance measures are inconsistent. In different circumstances family businesses risk tolerance is not static, socioemotional wealth is used as a reference point. So behavioural agency model can predict when will act a family business manager as an agent and raise financial performance to avoid loss. And it can tell us when is the time to follow family goals and let the usually short time oriented financial numbers be less impressive.

AGENT-PRINCIPAL PROBLEM, STEWARDSHIP THEORY AND BEHAVIOURAL AGENCY MODEL IN THE EXPLANATION OF FAMILY BUSINESS PERFORMANCE