This study examines the impact of family ties on firm performance, business risk, and executive tenure, using data from Spanish newspapers over 27 years (1966–93). It finds that firm performance and business risk are stronger predictors of CEO tenure when there are family ties between the firm's owners and the CEO. Additionally, the organizational consequences of CEO dismissal are more favorable when the replaced CEO is a family member. The study also shows that executives under weakly relational contracts are held more accountable for firm performance and business risk outcomes, even in nonfamily contracting situations. The study explores family-related contracting, where family bonds influence the principal-agent relationship. It argues that family ties deviate from purely economic motives and lead to behaviors different from economic rationality. The study hypothesizes that family-related contracting decouples an agent's employment from performance and business risk, and that the termination of agents with family status has a positive effect on firm survival. Empirical results support these hypotheses. The study contributes to the firm governance literature by examining the differences between family-related and non-family-related contracting. It suggests that family contracting may increase agency costs due to executive entrenchment, but that firm survival improves when safeguards are put in place. The study also highlights the importance of relational contracts, which are ambiguous rather than explicit, and the implications of the nature of a position on the strength of a relational contract. The study also addresses the family business research lacunae, noting that family-owned businesses account for a significant portion of the U.S. economy. The study's sample, which includes Spanish newspapers, is valuable because it represents firms typical of the global business environment. The study discusses the implications of family contracting on agency problems, including the potential for incongruity between the goals of the executive and the family, and the impact of family ties on business risk. It also examines the effects of family contracting on managerial entrenchment and the sensitivity of executive tenure to firm performance and business risk. The study finds that executives with family ties to the firm's owners are less sensitive to firm performance and business risk, and that the termination of family members has a more positive effect on firm survival. The study also finds that the relationship between firm performance, business risk, and executive tenure is weaker for executives under strongly relational contracts. The study concludes that family contracting has different implications for firm governance and survival compared to nonfamily contracting. It suggests that family ties can reduce agency costs and improve firm survival, but that family executives may also act opportunistically. The study highlights the importance of appropriate monitoring mechanisms in family firms to mitigate agency threats.This study examines the impact of family ties on firm performance, business risk, and executive tenure, using data from Spanish newspapers over 27 years (1966–93). It finds that firm performance and business risk are stronger predictors of CEO tenure when there are family ties between the firm's owners and the CEO. Additionally, the organizational consequences of CEO dismissal are more favorable when the replaced CEO is a family member. The study also shows that executives under weakly relational contracts are held more accountable for firm performance and business risk outcomes, even in nonfamily contracting situations. The study explores family-related contracting, where family bonds influence the principal-agent relationship. It argues that family ties deviate from purely economic motives and lead to behaviors different from economic rationality. The study hypothesizes that family-related contracting decouples an agent's employment from performance and business risk, and that the termination of agents with family status has a positive effect on firm survival. Empirical results support these hypotheses. The study contributes to the firm governance literature by examining the differences between family-related and non-family-related contracting. It suggests that family contracting may increase agency costs due to executive entrenchment, but that firm survival improves when safeguards are put in place. The study also highlights the importance of relational contracts, which are ambiguous rather than explicit, and the implications of the nature of a position on the strength of a relational contract. The study also addresses the family business research lacunae, noting that family-owned businesses account for a significant portion of the U.S. economy. The study's sample, which includes Spanish newspapers, is valuable because it represents firms typical of the global business environment. The study discusses the implications of family contracting on agency problems, including the potential for incongruity between the goals of the executive and the family, and the impact of family ties on business risk. It also examines the effects of family contracting on managerial entrenchment and the sensitivity of executive tenure to firm performance and business risk. The study finds that executives with family ties to the firm's owners are less sensitive to firm performance and business risk, and that the termination of family members has a more positive effect on firm survival. The study also finds that the relationship between firm performance, business risk, and executive tenure is weaker for executives under strongly relational contracts. The study concludes that family contracting has different implications for firm governance and survival compared to nonfamily contracting. It suggests that family ties can reduce agency costs and improve firm survival, but that family executives may also act opportunistically. The study highlights the importance of appropriate monitoring mechanisms in family firms to mitigate agency threats.