This study examines the role of family ties in agency contracts, using data from Spanish newspapers over a 27-year period (1966-1993). The research finds that firm performance and business risk are stronger predictors of CEO tenure when there are family ties between the firm's owners and executives. Additionally, the organizational consequences of CEO dismissal are more favorable when the replaced CEO is a family member. The study also demonstrates that executives under weakly relational contracts are held more accountable for firm performance and business risk outcomes, even in non-family contracting situations. The study contributes to the firm governance literature by advancing the understanding of relational contracts, where emotional criteria govern the terms of exchange rather than purely economic motives. It suggests that family contracting can increase agency costs due to executive entrenchment but that safeguards can improve firm survival. The study also highlights the importance of position in affecting the strength of relational contracts and their implications for executive monitoring. The research is valuable for its focus on family-owned businesses, which account for a significant portion of the global economy, and for its use of a diverse sample from outside North America. The findings indicate that monitoring mechanisms operate differently under family and non-family principal-agent contracts, with stronger relational contracts leading to less sensitivity of tenure to performance and business risk outcomes. The study's implications suggest that achieving "good agency" in family firms can be achieved through effective monitoring, which may help reduce agency costs and improve firm survival.This study examines the role of family ties in agency contracts, using data from Spanish newspapers over a 27-year period (1966-1993). The research finds that firm performance and business risk are stronger predictors of CEO tenure when there are family ties between the firm's owners and executives. Additionally, the organizational consequences of CEO dismissal are more favorable when the replaced CEO is a family member. The study also demonstrates that executives under weakly relational contracts are held more accountable for firm performance and business risk outcomes, even in non-family contracting situations. The study contributes to the firm governance literature by advancing the understanding of relational contracts, where emotional criteria govern the terms of exchange rather than purely economic motives. It suggests that family contracting can increase agency costs due to executive entrenchment but that safeguards can improve firm survival. The study also highlights the importance of position in affecting the strength of relational contracts and their implications for executive monitoring. The research is valuable for its focus on family-owned businesses, which account for a significant portion of the global economy, and for its use of a diverse sample from outside North America. The findings indicate that monitoring mechanisms operate differently under family and non-family principal-agent contracts, with stronger relational contracts leading to less sensitivity of tenure to performance and business risk outcomes. The study's implications suggest that achieving "good agency" in family firms can be achieved through effective monitoring, which may help reduce agency costs and improve firm survival.