The strength of the board on sustainability assurance decisions: The moderating role of family business

Abstract

Purpose

The purpose of this paper is to analyze how family ownership influences the strength of the board’s monitoring function in companies’ decisions regarding the assurance of sustainability reports.

Design/methodology/approach

The international sample consists of 536 companies operating in more stakeholder-oriented countries during the period 2007-2014. The paper proposes alternative logit models of analysis using the random-effects estimator.

Findings

The results provide evidence that a firm’s sustainability assurance and its choice of accounting professionals as higher quality assurers are positively associated with board size and independence. The main result is the positive impact of family businesses on these assurance issues. The paper evidences the greater orientation toward sustainability issues of family businesses. Furthermore, it verifies the greater impact of board size on family firms’ assurance demand.

Originality/value

This study sheds some light on the unexplored topic of sustainability assurance in family firms. One of the differentiating aspects with respect to previous studies is the consideration of the moderating factor of family property. This study also contributes to the understanding of family firms’ demand for assurance and its practitioners, and the literature’s focus on its determinants.

Citation

Martinez-Ferrero, J., Rodríguez-Ariza, L. and María García-Sánchez, I. (2017), "The strength of the board on sustainability assurance decisions: The moderating role of family business", Journal of Small Business and Enterprise Development, Vol. 24 No. 4, pp. 863-886. https://doi.org/10.1108/JSBED-02-2017-0044