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Open Access
Article
Publication date: 26 September 2023

Giovanna Gavana, Pietro Gottardo and Anna Maria Moisello

The aim of this paper is to examine the effect of structural and demographic board diversity as well as board tenure on family firms' environmental performance, by analyzing the…

1203

Abstract

Purpose

The aim of this paper is to examine the effect of structural and demographic board diversity as well as board tenure on family firms' environmental performance, by analyzing the differences between family and non-family businesses and within family firms.

Design/methodology/approach

Tobit regressions are applied to investigate the effect of independent directors, CEO non-duality, board gender diversity and board tenure on environmental performance. The study also controls for other board and firm characteristics, as well as for time, industry and country-fixed effects. In doing so, the authors rely on a sample of non-financial listed firms from France, Germany, Italy, Spain and Portugal over the period 2014–2021.

Findings

The authors find that women on the board positively influence environmental performance and this effect is significant only in family firms, although board tenure negatively moderates the relationship. Board independence significantly affects environmental performance only in non-family firms. A strong presence of family directors has a negative effect on family firms' environmental performance, especially when directors' turnover is low.

Originality/value

This paper examines the unexplored relationship between structural board diversity and environmental performance in family companies. This study provides empirical evidence on the association between gender diversity and family firms' environmental performance focusing for the first time on a European setting. Moreover, this study provides evidence of a different effect of board tenure in family and non-family businesses.

Details

Journal of Family Business Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 12 October 2023

Esraa Esam Alharasis and Fairouz Mustafa

The purpose of this paper is to provide new scientific knowledge concerning the impact of the Covid-19 pandemic on auditing quality as determined by audit fees for both family…

Abstract

Purpose

The purpose of this paper is to provide new scientific knowledge concerning the impact of the Covid-19 pandemic on auditing quality as determined by audit fees for both family- and non-family-owned firms in Jordan.

Design/methodology/approach

The authors use an ordinary least squares (OLS) regression firm-clustered standard error employing data from 200 Jordanian enterprises between 2005 and 2020 to validate this study's hypotheses.

Findings

The regression findings suggest that enterprises run by families are better able to handle crises and spend less on audits. Companies that are not family-owned have to spend the most on monitoring tasks since they need to take extra steps to prevent the agency problem and make their financial statements stand out from their peers in order to attract more investors. Additional analysis that stretched out throughout 2005–2022 came to the same findings.

Practical implications

The findings can be beneficial for authorities to better regulate and supervise the auditing sector. Political leaders, legislators, regulators and the auditing industry can all learn important lessons from the findings as they assess the growing concerns in a turbulent economic situation. The results of this research can, therefore, be utilised to reassure investors and assist policymakers in crafting workable responses to Covid-19's creation of financial problems. After the devastation caused by the coronavirus, these findings may be used to strengthen the laws that oversee Jordan's auditing sector.

Originality/value

In emerging nations like Jordan, where there is a clear concentration of ownership and a predominance of high levels of family ownership, and to the best of the authors' knowledge, this is the first empirical study to compare the auditing quality of family-owned versus non-family-owned enterprises. Preliminary insights into the crisis management tactics of family and non-family organisations are provided by this first empirical investigation of the consequences of the Covid-19 crisis on family-owned firms.

Details

Journal of Family Business Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 9 May 2023

Md Tariqul Islam, Shrabani Saha and Mahfuzur Rahman

The empirical study aims to examine the impact of board diversity with respect to gender and nationality on firm performance in an emerging economy. This research further splits…

Abstract

Purpose

The empirical study aims to examine the impact of board diversity with respect to gender and nationality on firm performance in an emerging economy. This research further splits the sample into family and non-family domains and investigates the diversity–performance nexus in isolation.

Design/methodology/approach

The sample consists of 183 listed companies in Bangladesh over the period 2007 to 2017. This study employed the generalised method of moments (GMM) technique to address the possible endogeneity issue in the governance–performance connection. To underscore the strength of diversity, three distinctive assessment measures were used: percentage representation of females and foreign directors, the Blau index and the Shannon index.

Findings

The results for the full sample models reveal that board heterogeneity regarding both female and foreign directors positively and significantly influences firm performance as measured by return on assets (ROA). Further to this, female directors in family-owned businesses have a positive association with profitability, whereas foreign nationals demonstrate a significant positive association with performance in non-family firms. Additionally, at least three women directors are needed to make a positive difference in profitability; however, a sole director with foreign nationality is capable of demonstrating a similar impact on performance.

Practical implications

The findings are significant for policymakers and organisations that advocate diversity on corporate boards of directors, and the minimum number of diverse board members needs to be considered depending on the identity to bring about a significant change in organisational outcome. Therefore, the findings of this study may be applied to other emerging economies with similar institutional characteristics.

Originality/value

This study reinforces the existing stock of knowledge on the impact of board diversity on the profitability of firms, especially in the context of an emerging economy – Bangladesh. Irrespective of the given backdrop, this study finds that both gender and nationality diversity in the case of Bangladesh is found to have a positive and significant effect on financial performance with respect to all the diversity metrics, i.e. the proportionate number of female and foreign directors on the boards, the Blau index and the Shannon index.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Open Access
Article
Publication date: 10 August 2023

Francesca Rossignoli, Andrea Lionzo, Thomas Henschel and Börje Boers

The aim of this paper is to analyse the role of communities of practice (CoP) as knowledge-sharing tools in family small and medium-sized enterprises (SMEs). In this context, CoPs…

Abstract

Purpose

The aim of this paper is to analyse the role of communities of practice (CoP) as knowledge-sharing tools in family small and medium-sized enterprises (SMEs). In this context, CoPs that jointly involve family and non-family members are expected to act as knowledge-sharing tools.

Design/methodology/approach

This paper employs a multiple case study methodology, analysing the cases of six small companies in different sectors and countries over a period of 8 years. Both primary and secondary data are used.

Findings

The results show the role CoPs play in involving family and non-family members in empowering knowledge-sharing initiatives. A CoP's role in knowledge sharing depends on the presence (or lack) of a family leader, the leadership approach, the degree of cohesion around shared approaches and values within the CoP, and the presence of multiple generations at work.

Originality/value

This paper contributes to the literature on knowledge sharing in family businesses, by exploring for the first time the role of the CoP as a knowledge-sharing tool, depending on families' involvement in the CoP.

Details

Journal of Family Business Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

Keywords

Open Access
Article
Publication date: 9 October 2023

Jenny Ahlberg, Sven-Olof Yrjö Collin, Elin Smith and Timur Uman

The purpose of this paper is to explore board functions and their location in family firms.

Abstract

Purpose

The purpose of this paper is to explore board functions and their location in family firms.

Design/methodology/approach

Through structured induction in a four-case study of medium-sized Swedish family firms, the authors demonstrate that board functions can be located in other arenas than in the common board and suggest propositions that explain their distribution.

Findings

(1) The board is but one of several arenas where board functions are performed. (2) The functions performed by the board vary in type and emphasis. (3) The non-family directors in a family firm serve the owners, even sometimes governing them, in what the authors term “bidirectional governance”. (4) The kin strategy of the family influences their governance. (5) The utilization of a board for governance stems from the family (together with its constitution, kin strategy and governance strategy), the board composition and the business conditions of the firm.

Research limitations/implications

Being a case study the findings are restricted to concepts and theoretical propositions. Using structured induction, the study is not solely inductive but still contains the subjectivity of induction.

Practical implications

Governance agents should have an instrumental view on the board, considering it one possible governance arena among others, thereby economizing on governance.

Social implications

The institutional pressure toward active boards could paradoxically reduce the importance of the board in family firms.

Originality/value

The board of a family company differs in its emphasis of board functions and these functions are performed with varying emphases in different governance arenas. The authors propose the concept of kin strategy, which refers to the governance importance of the structure of the owner and observations on bi-directional governance, indicating that the board can govern the owners.

Details

Journal of Family Business Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 5 December 2023

Zouhair Boumlik, Badia Oulhadj and Olivier Colot

This paper aims to analyze the effect of family control and influence dimension of the socioemotional wealth (SEW) on capital structure of large listed firms in the North African…

Abstract

Purpose

This paper aims to analyze the effect of family control and influence dimension of the socioemotional wealth (SEW) on capital structure of large listed firms in the North African region.

Design/methodology/approach

The study uses panel data of the top 98 largest listed firms in the North African capital markets over the period from 2018 to 2022. The analysis is conducted employing random effects models.

Findings

Findings suggest that large listed firms in North African region rely on more use of equity rather than debt financing. Further, results show that family control and influence dimension of the SEW, has no significant impact on the capital structure of North African large listed firms. This implies that the financing behavior of large firms listed in the North African countries is driven by financial and rationale factors rather than non-economic considerations. Indeed, findings support assumptions of the pecking order theory.

Originality/value

This transnational study provides new insights into relevancy of socioemotional theory in explaining capital structure decisions within large family businesses in emerging markets. Findings have the potential to enhance analysts', investors' and practitioners' understanding of financing decisions by large listed firms in this region. This, in turn, can aid in conceiving adapted financing solutions.

Details

Journal of Family Business Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 19 July 2023

António Miguel Martins and Cesaltina Pacheco Pires

This study explores whether the unique organizational form of family firms helps to mitigate the negative effects caused by the announcement of product recalls.

Abstract

Purpose

This study explores whether the unique organizational form of family firms helps to mitigate the negative effects caused by the announcement of product recalls.

Design/methodology/approach

The authors use an event study, for a sample of 2,576 product recalls in the United States (US) automobile industry, between January 2010 and June 2021.

Findings

The authors found that stock market's reaction to a product recall announcement is less negative for family firms. This superior performance is partially driven by the family firms' long-term investment horizons and higher strategic emphasis on product quality. However, the relationship between family ownership and cumulative abnormal returns around product recall announcements is nonlinear as the impact of family ownership starts by being positive but becomes negative for higher levels of family ownership. The authors also find that family firm's chief executive officer (CEO) and managerial ownership influence positively the stock market reaction to product recall announcements.

Practical implications

This work has several implications for family firms' management as well as for investors and financial analysts. First, as higher managerial ownership is associated with a greater emphasis on product quality, decreasing stock market losses when a product recall occurs, family firms should consider increasing equity-based compensation. Second, as there seems to exist an optimal proportion of family ownership, family firms should consider the risks of increasing too much their ownership share. Third, investors and financial analysts can use the results in the study to help them in their investment and trading decisions in the stock market.

Originality/value

The authors extend the knowledge of product recalls by studying the under-researched role of the flexible, internally focused culture of family businesses on the stock market reaction to product recalls.

Details

Journal of Family Business Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

Keywords

Open Access
Article
Publication date: 27 September 2023

Eva Wagner, Helmut Pernsteiner and Aisha Riaz

This study aims to provide insights into gender diversity in Pakistani boardrooms, particularly for the dominant family business type, which is strongly guided by (non-financial…

Abstract

Purpose

This study aims to provide insights into gender diversity in Pakistani boardrooms, particularly for the dominant family business type, which is strongly guided by (non-financial) family-related objectives when making business decisions, such as the appointment of board members. Pakistani companies operate within the framework of weak legal institutions and a traditionally highly patriarchal environment. This study examines how corporate decisions regarding the appointment of female board members play out in this socio-political and cultural environment.

Design/methodology/approach

Board composition and board characteristics were examined using hand-collected data from 213 listed family firms and non-family firms on the Pakistan Stock Exchange from 2003 to 2017. Univariate analyses, probit regressions and robustness tests were performed.

Findings

Pakistani family firms have a significantly higher proportion of women on their boards than do non-family firms. They are also significantly more likely to appoint women to top positions, such as CEO or chairs.

Practical implications

Evidently, women are allowed to enter boards through family affiliations. Gender quotas appear an ineffective instrument for breaking through the “glass ceiling” in this socio-cultural environment. Thus, gender parity must entail the comprehensive promotion of women and the enforcement of legal reforms for structural and cultural change.

Originality/value

The analysis focuses on a Muslim-majority emerging Asian market that has been scarcely researched, thus offering new perspectives and insights into board composition and corporate governance that go beyond the well-studied Western countries.

Details

Gender in Management: An International Journal , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-2413

Keywords

Article
Publication date: 26 March 2024

Kristin Sabel, Andreas Kallmuenzer and Yvonne Von Friedrichs

This paper aims to examine how organisational values affect diversity in terms of different competencies in rural family Small and Medium-sized Enterprises (SMEs). Recruiting a…

Abstract

Purpose

This paper aims to examine how organisational values affect diversity in terms of different competencies in rural family Small and Medium-sized Enterprises (SMEs). Recruiting a diverse workforce in rural family SMEs can be particularly difficult due to the prevalence of internal family values and the lack of available local specialised competencies. A deficiency of diversity in employment and competence acquisition and development can create problems, as it often prevents rural family SMEs from recruiting employees with a wide variety of qualifications and skills.

Design/methodology/approach

The study takes on a multi-case method of Swedish rural family SMEs, applying a qualitative content analysis approach. In total, 20 in-depth structured interviews are conducted with rural family SME owners and 2 industries were investigated and compared – the tourism and the manufacturing industries.

Findings

Rural family SMEs lack long-term employment strategies, and competence diversity does not appear to be a priority for rural family SMEs, as they often have prematurely decided who they will hire rather than what competencies are needed for their long-term business development. It is more important to keep the team of employees tight and the family spirit present than to include competence diversity and mixed qualifications in the employment acquisition and development.

Originality/value

Contrary to prior research, our findings indicate that rural family SMEs apply short-term competence diversity strategies rather than long-term prospects regarding competence acquisition and management, due to their family values and rural setting, which strictly narrows the selection of employees and competencies. Also, a general reluctance towards competence diversity is identified, which originates from the very same family values and rural context.

Details

International Journal of Entrepreneurial Behavior & Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1355-2554

Keywords

Open Access
Article
Publication date: 28 February 2024

Andrea Caccialanza

The deeper understanding of the disclosure of external and internal dynamics of family firms necessarily places the issue of sustainability as one of the most pressing needs from…

Abstract

Purpose

The deeper understanding of the disclosure of external and internal dynamics of family firms necessarily places the issue of sustainability as one of the most pressing needs from both a research and managerial perspective. Therefore, this perspective article contributes to the debate of sustainability performance disclosure in family firms, proposing a research agenda.

Design/methodology/approach

This study has organized the discussion around those elements that most significantly impact the propensity to disclose, with a specific focus on the interconnections and interrelations within them. The proposed research agenda is developed around three key elements: “how” firms disclose, “the reason why” they do it and “what” disclose of their performance(s).

Findings

To better understand “how” family firms should disclose their performance, it is suggested to engage in proactive stakeholder engagement to preserve long-term socioemotional wealth. “The reason why” for disclosure is still associated with the legitimization of family firms from an economic, social and environmental point of view. Finally, the “what” depends on several factors, such as the regulatory framework and the market involved.

Practical implications

This paper contains suggestions for family firm managers, consultants and policymakers that are approaching corporate social responsibility (CSR) and non-financial reporting or sustainability disclosure overall, providing an overview of relevant factors influencing this transition process.

Originality/value

This paper suggests a logical framework to combine these three elements of the debate as strictly interrelated to foster the sustainability performance disclosure of family firms.

Details

Journal of Family Business Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

Keywords

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