This study aims to investigate the influence of the capabilities of chairmen and CEOs on environmental, social and governance (ESG) disclosure in Malaysian family firms, focusing on the moderating role of family control. This research further explores how family involvement in ownership and leadership shapes ESG practices within these organizations and how these practices contribute to sustainable development. By focusing on ESG disclosure, this study underscores the importance of governance structures in attracting sustainable investment and ensuring that family businesses align their strategies with the growing global emphasis on sustainability and responsible investment.
This research applies a quantitative approach, using data from 65 Malaysian family firms over a five-year period (2018–2022). This study uses content analysis to compute ESG disclosure scores, alongside regression models to examine the relationships between leadership capabilities, family control and ESG transparency.
This study finds that CEO capabilities positively influence ESG disclosure, while chairman capabilities do not show a significant impact. It also uncovers that family control has a negative effect on overall ESG disclosure but positively moderates the relationship between CEO capabilities and ESG disclosure. This research highlights the key role of family CEOs in driving ESG practices within family firms.
This research contributes to the literature by integrating insights from upper echelons theory and socioemotional wealth theory to explore the unique dynamics of family firms. It offers new perspectives on the roles of chairmen and CEOs in shaping ESG disclosure, particularly within the context of family control in Malaysian firms, challenging traditional views of family governance in corporate sustainability. This study challenges traditional views of family governance in corporate sustainability, emphasizing how governance structures can facilitate the adoption of ESG principles that support sustainable investment and development. By doing so, it provides valuable insights into how family-owned businesses can adapt their governance practices to meet the demands of the growing sustainable investment market.
