This study summarizes earlier research on the impact of internal family governance on corporate social responsibility (CSR) performance and CSR reporting as a major element of family firm heterogeneity.
Relying on a literature review, internal family governance is separated into group-related characteristics (e.g. board level, (top) management level) and individual internal governance attributes (e.g. chief executive officer (CEO) board chair). Fifty-five studies published between 2004 and the present were examined. Potential country effects were analyzed by grouping country-specific studies according to the Organisation for Economic Cooperation and Development (OECD) membership and board structure.
Most studies examined the influence of family CEOs on CSR performance, while other aspects of internal family governance – such as family board chair or a family (top) management member – and CSR reporting received less attention. Overall, the relationship between internal family governance and CSR was inconclusive, which is consistent with the two distinct perspectives of socioemotional wealth (SEW) (SEW-as-inspiration and SEW-as-restriction). However, in line with the SEW-as-restriction view, we stress some tendencies toward a negative relationship between group-related family governance and CSR outcomes in non-OECD countries and countries with mandatory one-tier systems.
Future research on internal family governance and CSR outcomes should recognize the demographic factors, social capital, and human capital of family board and (top) management team members. Among others, the impact of family board members' sustainability skills and networks on CSR should be analyzed in detail.
Family board and management members should increase their environmental and social expertise to increase the probability of substantive CSR strategies, management systems, and reporting. These efforts should strengthen stakeholder trust and overall family firm reputation.
Stakeholders should carefully examine the quality of internal family governance considering the heterogeneity of family firms and management discretion related to CSR.
To the best of the author's knowledge, this is the first literature review on internal family governance as a major element of corporate governance and CSR. Moreover, the separation of internal family governance into individual and group-related attributes, CSR performance, and CSR reporting increases the transparency for researchers.
