A closer look at diversity and performance in family firms

Abstract

Purpose

Ownership structure plays a significant role in determining board demographic diversity. However, it is still unclear how different ownership configurations impact the structures of firm's boards and how board diversity influences firm performance. This study aims to investigate the relationship between family ownership and board diversity. Therefore, in this study, the authors argue that family firms have a lower level of board demographic diversity (in terms of age, gender and nationality) than non-family firms and that board diversity moderates the relationship between ownership and firm performance.

Design/methodology/approach

To test the authors’ hypotheses, we draw data from a sample of 341 German family and non-family firms for a period of five years.

Findings

The results show that family firms are less diverse in terms of age, gender and nationality diversity than non-family firms.

Originality/value

This study contributes to the general understanding of family firms and in particular the role ownership plays in shaping board demographic diversity.

Citation

Mubarka, K. and Kammerlander, N.H. (2023), "A closer look at diversity and performance in family firms", Journal of Family Business Management, Vol. 13 No. 4, pp. 828-855. https://doi.org/10.1108/JFBM-12-2021-0155