Family Control and Corporate Social Responsibility: The Moderating Effect of the Board of Directors

Abstract

This paper examines the effect of family control on corporate social responsibility (CSR) in French-listed companies. Based on quantile regressions, our results show that family identity and involvement in capital and management positively influence CSR performance, particularly for low-CSR firms. These findings support the socio-emotional perspective of family firms. However, families with excess control engage less in CSR activities for expropriation purposes. Additional analysis shows that board size and gender diversity attenuate the negative effect of excess family control on CSR performance and help then mitigating the expropriation risk by family-controlled firms.

Implementing Sustainable Development Concept: A Typology of Family Firms in Poland

“…Meanwhile, another study revealed that family involvement in management improves company commitment to sustainable development, even if it was originally at a low level. Moreover, these studies demonstrate that family ownership positively influences the level of implementation of sustainable solutions [19], with Sharma and Sharma [21] suggesting that family-owned businesses are more likely to have positive intentions to pursue proactive environmental strategies than other types of family businesses and non-family businesses. Elsewhere, Samara et al [23] have indicated that different levels of family involvement in ownership and management influence the environmental and social performance of a family business, and Cabrera-Suárez et al [22] have reported that enterprises with at least 50% of managerial positions held by family members are characterized by a greater level of commitment to sustainable development than other companies.…”

“…However, more recent bibliometric analysis has confirmed an increase in research focused on the involvement of family businesses in sustainable development [58], confirming the lack of consensus and the existence of conflicting results in most studies, which prompts this study's comprehensive investigation of factors of family business engagement in sustainability. Moreover, despite the significant contribution of family businesses to social, environmental and economic issues, there remains limited research concerning the different levels of company engagement in sustainable development [19]. In fact, the literature indicates gaps that must be filled through further studies [14,15,18], leading this article to emphasize family businesses as units of analysis and attempt to recognize their level of engagement with sustainable development.…”

“…Notably, studies have utilized ununified sampling and different methods of investigation [2]. Additionally, relatively limited research has investigated the level of family business engagement in sustainable development [14,15,18,19]. Within the extant research, several internal factors of family business sustainability have been studied, including long-term orientation, corporate governance, family involvement in ownership and management, values and educational background, relationship with stakeholders, community commitment, reputation and firm size [2].…”

“…Although numerous studies have investigated the impact of family involvement in management and ownership on the implementation of sustainable solutions [12,19,[21][22][23], few studies have examined the broader context of family engagement. By recognizing the role of inter-group behaviour, especially an individual's emotions regarding group membership and being part of group decision making [24], social identity theory presents the suitable approach to investigating whether the engagement of family employees is likely to increase a company's commitment to sustainable development.…”